Corporate bonds investment bank data analysis--英国Essay代写范文

英国Essay代写范文:“Corporate bonds investment bank data analysis”，这篇论文主要描述的是在对债券的数据进行分析的过程中投资银行的企业财务分析师的作用就得到了发挥，我们可以发现运用多项式的方法可以使我们较为容易的识别一些报错价的债券，并能够为企业的资金筹集提供比较合理的建议，例如应该以什么样的价格来在交易所中发行出售债券。

In the process of the analysis of the Figures of bond as a role of corporate finance analyst in an investment bank, the results are found out with a specific method applied which is linked to the polynomial method.In the application of this method, misprice bonds can be identified. Besides that, in the respective of the company, its goal is referred to the raising the money from the investment activities such as selling out and buying in the specific bonds, for example, what the best price to sell the bond in the exchange marketing. Therefore, the article would be focus on application of thepolynomial method and with an analysis process to the final result in the research of the bonds.

To better understand the figures of bond, the following term should be well explained in the following: the term of “YTM” is referred to the internal rate of return of the bond, and would be the return on the bond if was held to maturity and all coupon payments were invested at that rate.In addition, the key word of “yield to maturity” (or redemption yield) is pointed to the single rate of interest that equates the present value of thebond’s cash flows with its market price.

Method

Polynomial trend is pointed to the systematic relationship between yields and maturity by fitting a trend to the yield curve. In addition, the relationship between yields and maturity is not linear. Furthermore, an polynomial method can be explained by a simple equation that yi=a+bMi+CMi^2+dMi^3 , where yiand Mi are the yield and maturity of bond i, a, b, c and d are parameters to be estimated, and eiis thedeviation of the actual yield from the fitted yield.What is more? Third-order polynomial trends have two turning points.

In the application of this method, the model should be built in the equation. The estimated equation is that yi= 0.618519+0.473494Mi-0.012732Mi^2+0.000044Mi^3.To compare the actual YTM and fitted YTM, if actual YTM is more than fitted YTM, the price is lower priced. Conversely, if actual YTM is less than fitted YTM, the price is overpriced. In addition, in theprocess of the application, use the fitted YTM to find the fair price of thebond.

Data

The data is found at the website which contains the figures of the all A rated bonds issued by US companies, except for those with very short maturity. In addition, 4,754 bonds figures are contained in the research with the maturity of 15 years.

Result

Figure 1: Yield to maturity

As can be seem in the Figure 1, a yield to maturity’s equation that is reflected in the equation yi= 0.618519+0.473494Mi-0.012732Mi^2+0.000044Mi^3 is pointed. In the real case here, Mi equals 15 in the equation. In the calculation, it has the actual YTM is 4.957%, but actual YTM is 5.005% after calculation when Mi equals 15. That means the bond maybe overpriced in the market.

Dates CF Year(s) Period(s) PV

2015/5/15 27.5 0.5 1 26.829

2015/11/14 27.5 1 2 26.174

2016/5/14 27.5 1.5 3 25.534

2016/11/13 27.5 2 4 24.911

2017/5/15 27.5 2.5 5 24.303

2017/11/13 27.5 3 6 23.709

2018/5/15 27.5 3.5 7 23.131

2018/11/14 27.5 4 8 22.566

2019/5/15 27.5 4.5 9 22.015

2019/11/14 27.5 5 10 21.477

2020/5/14 27.5 5.5 11 20.953

2020/11/13 27.5 6 12 20.441

2021/5/15 27.5 6.5 13 19.942

2021/11/13 27.5 7 14 19.455

2022/5/15 27.5 7.5 15 18.980

2022/11/14 27.5 8 16 18.517

2023/5/15 27.5 8.5 17 18.065

2023/11/14 27.5 9 18 17.624

2024/5/14 27.5 9.5 19 17.194

2024/11/13 27.5 10 20 16.774

2025/5/15 27.5 10.5 21 16.364

2025/11/13 27.5 11 22 15.965

2026/5/15 27.5 11.5 23 15.575

2026/11/14 27.5 12 24 15.195

2027/5/15 27.5 12.5 25 14.824

2027/11/14 27.5 13 26 14.462

2028/5/14 27.5 13.5 27 14.109

2028/11/13 27.5 14 28 13.764

2029/5/15 27.5 14.5 29 13.428

2029/11/13 1027.5 15 30 489.470

Figure 2: the calculation of the fair price

Bond Price

YTM  1056.979

3.00% 1300.198

3.15% 1279.209

3.30% 1258.641

3.45% 1238.487

3.60% 1218.736

3.75% 1199.379

3.90% 1180.410

4.05% 1161.818

4.20% 1143.595

4.35% 1125.734

4.50% 1108.227

4.65% 1091.065

4.80% 1074.242

4.95% 1057.751

5.10% 1041.583

5.25% 1025.732

5.40% 1010.191

5.55% 994.954

5.70% 980.014

5.85% 965.364

Figure 3: the bond price calculation

Besides that, as can be seem in the Figure 3, in the process of the calculation, this suggested that the bond’s current price is 1,056.979, it is fair price equals to 1,051.74, which is lower than current price in the market. Moreover, Figure 2 demonstrated that the strategy for the bond would be selling this bond. However, the price is lower than the 1051.74 which is pointed to the sum of the PV that is last column of the table.In addition, PV= CF/ (1+YTM/2) ^ (period), the results can be shown in the Figure 2. If the market price of the bond is more than fair value, the company could considerselling more bonds in the exchange market. Conversely, the companyshould consider buying more shares, If the market price of the bond is less than fair value.

Limitation and improvement

Third-order polynomial model is only associated used in practice, since for many short-term forecasting application and micro-forecasting applications, local trends are adequately demonstrating using first or second order polynomials. In addition, the main problem lay not so much in forecasting the total consumption as in proportionate consumptions.

The improvement would be combination with the first and second polynomial method together to predict the short-term and long-term together and also upgrade the sample size to predict the total consumptions in the future.

Conclusion

In summary, the bond maybebe overpriced in the market. In addition, the fair price is 1051.74. Furthermore, if the market price of the bond is more than fair value, the company could considerselling more bonds in the exchange market. Conversely, the company should consider buying more shares, If the market price of the bond is less than fair value. Furthermore, the improvement would be combination with the first and second polynomial method together to predict the short-term and long-term together and also upgrade the sample size to predict the total consumptions in the future.

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