We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Banc one corporation (interest rate yield curve and how Banc One's interest swaps impact the curve) - Essay Example

Comments (0)
Munaf Usmani Academia Research 1st March 2011 Interest Rate Yield Curve and How Banc One's Interest Swaps Impact the Curve When we’re talking about the interest rate yield curve for Banc One Corporation, we imply the realized rate of return it is generating from net investments…
Download full paper
Banc one corporation (interest rate yield curve and how Banc Ones interest swaps impact the curve)
Read TextPreview

Extract of sample
Banc one corporation (interest rate yield curve and how Banc One's interest swaps impact the curve)

Download file to see previous pages... These swaps had a significant impact on their portfolio. Initially, they engaged in fixed-receiving IRSs’ which provided them with an above-market return or implied yield. In this case, swaps assisted them in generating higher returns, and thus its yield curve witnessed an upward shift. However, this yield curve would be flat as the rate is fixed. Also, it is shift in the implied yield rather than a rising slope because the tenure of the investment remained the same. After this, Banc One changed gears and opted for investing in short-term floating rate instruments and then entering into medium-term receive-fixed swaps. This again boosted the yield for the corporation, and at the same time provided liquid investments. The advantages of this structured product greatly outweighed the disadvantages. As part of its ongoing strategy to invest in CMOs’, the bank began to consider the development of a synthetic swap which would cater to the CMO investments which Banc One had made. Amortized Interest Rate Swaps were introduced. In this derivative, the bank was receiving a fixed rate and paying a floating rate. However, there was a risk of prepayments of the mortgages in which the bank had invested in. If the interest rates were to fall, the amortization of the CDOs’ would increase rapidly and the bank would find itself with funds to reinvest in a depressed market. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Treasury Yield Curve
The risk free interest rate is the interest rate on a security which has no risk such as Treasury Bills. The real risk free interest rate is not constant and changes in relation to economic conditions such as “on the rate of return corporations and other borrowers expect to earn on productive assets and on people’s time preferences for current versus future consumption” (Brigham and Ehrhardt 2005, p28).
3 Pages(750 words)Coursework
Analyzing the Yield Curve
The yield curves are plotted from shortest to longest maturities. A yield curve should always exhibit the characteristic of bonds with similar riskiness. For instance, we cannot plot a yield curve using different maturities of treasury, municipal and corporate bonds.
2 Pages(500 words)Essay
Yield Curve
Yield Curve. Yield Curve The yield curve is defined as a “graph that plots the yields of similar-quality bonds against their maturities, ranging from shortest to longest” (Investing Answers, 2011, par. 1). From the Bloomberg website, the yield curve as of 8 April 2011 is depicted below: Source: Bloomberg, 2011 Using the yield curve, today’s financial marketplace expects interest rates to remain steady over the near future with short term yields generating lower returns than long term yields.
2 Pages(500 words)Essay
Yield Curve
The last traded price of the stock of Wal-Mart Stores Inc. is $53.19 on 29th August, 2011. The price of the stock at the same point last year was $50.55. The price has shown an increase of 5.22% in the past one year. During the year the stock has been at a high of $57.57 and a low of $48.41.
4 Pages(1000 words)Essay
Interest Rate SWAPS
The specified underlying or rather the fundamental asset is probable to exist in the form of forex, equity, commodity or even other existing relevant asset. There have been stated to be numerous forms of derivatives contracts that are being used among which interest rate swaps is considered to be a common form (Hunt & Kennedy, 2004).
8 Pages(2000 words)Literature review
Term Structure / Yield Curve, Financial Crises and Foreign Exchange Market
The US treasury was one of the driving forces behind the rise or decline of the yield curve in 2000. The timing of the market can thus be assessed by the yield curve as to whether it will yield profit or loss in the share market. The Yield curve as discussed above has various securities with different holding period return.
3 Pages(750 words)Essay
Executive summary There is need to understand the economic tantrums that are witness in the world. The essence to understand these changes and as such predict them necessitates the use of the yield curve. This paper examines the yield curve and point out the influence in the prediction of the economy.
5 Pages(1250 words)Essay
Inverted Yield Curve
The author of the essay emphasizes that the inverted yield curve is a rare phenomenon, and indicates that bonds with longer-term maturities command lower interest rates as compared bonds with shorter-term maturities. It is also mentioned that ‘Inverted yield curve’ is an indicator of pessimism being creeping into the behavior of economic set up of a nation.
6 Pages(1500 words)Essay
This was different as per the percentage distribution of colors posted in the company website. As such, it was critical to carry out an analysis. The quantities of every
1 Pages(250 words)Essay
The Yield Curve Kink Decision
This paper aims at analyzing the financial performance of Greydanus, Broekh, and Associates. One of the major aspects that make GBA to perform effectively in its financial operations is the skills that are
3 Pages(750 words)Essay
Let us find you another Essay on topic Banc one corporation (interest rate yield curve and how Banc One's interest swaps impact the curve) for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us