FIN 350 Week 5 Practice Problems, Discussion Question


Category: FIN 350


FIN 350 Week 5 Module 5 Practice Problems

Complete the following problems from chapter 6 in the textbook:

  •  P6-5
  •  P6-11
  •  P6-17
  • P6-18
  •  P6-22

Follow these instructions for completing and submitting your assignment:

1. Do all work in Excel. Do not submit Word files or *.pdf files.

2. Submit a single spreadsheet file for this assignment. Do not submit multiple files.

3. Place each problem on a separate spreadsheet tab.

4. Label all inputs and outputs and highlight your final answer.

FIN 350 Week 5 Module 5 Discussion Question 1

There is an inverse relationship between interest rate changes and changes in the market price of outstanding bonds. Explain the logic behind this principle. Given this relationship, do you believe it is currently a good time to buy bonds? Why or why not?

FIN 350 Module 5 Discussion Question 2

Agencies such as Moody’s, Fitch, and Standard & Poor’s rate the default risk of various municipal and corporate bonds. While their rating systems are proprietary, it is widely known that they rely on financial ratios as key inputs to their bond ratings. Which financial ratios (list at least two) do you believe would be the most helpful to rate corporate bonds? Why?