Essential of investments Assignment Example | Topics and Well Written Essays - 500 words

Essential of investments - Assignment Example The accrued interest on the bond turned out to be $2.42. The YTMs were calculated using the YIELD function on excel, with settlement date and maturity date taken at a difference of 10 years, coupon rate being 14% and then reduced to half at 7%, the bond price being $900, redemption value being $1000, and 1 coupon annually. The YTM based on what the firm promised is 2.55%. However, based on what the investors expect after the lenders and the firm agreed to lower the payments the YTM became 1.80%. The expected YTM is lower than the YTM investors were actually promised. a. The initial price is calculated as P=$705.46, with [n=20, I/Y=8, PMT=50, FV=1000]. The price in the next period would be P=$793.29, with [n=19, I/Y=7, PMT=50, FV=1000]. Therefore the HPR is 19.53% calculated as, [{50+(793.29-705.46)}/705.46] c. The 6% coupon bond performed better than the zero coupon bond in either case, when the interest rose or when they fell. This is probably due to the fact that the 6% coupon bond has a higher convexity. This shows that whenever we compare the change in yields of bonds by equal amounts as is in this question, the bond with higher convexity will always outperform the one with lower convexity. The duration was approximately equal but the convexity of both the bonds were different in this example which is always positive implies that the convexity effect always favors the higher convexity bond. d. Such a scenario where the bonds would be priced at the same yield to maturity if the rates changed in equal amounts cannot exist. No investor would buy a bond with a lower convexity as it always underperform the higher convexity bond. The price of the lower convexity bond will be low with a high YTM, which means that the higher yield is to compensate the investor for investing in a lower convextiy bond. The top-down method of security valuation is approach used

Quality management Essay Example | Topics and Well Written Essays - 2000 words

Quality management - Essay Example A number of scholars and theorists have contributed their knowledge and expertise towards the study of quality of management. Majority of such theories have been developed from actual organizational experiences. Juran, Feigenburn, and Deming were amongst the earliest theorists who contributed valuable ideas and concepts towards quality management in organizations. These ideas were further extended and made adaptable by the Japanese theorists namely; Genichi Taguchi, Shigeo Shingo, and Kaoru Ishikawa. The ideas provided by such eminent scholars led to the development of important quality management techniques such as Six Sigma, Just in time, Mc Kinsey 7S framework, Jidoko, Kaizen and quality circles amongst much more. These concepts are widely practiced in modern organizations to gain efficiency in operations and attain quality related objectives in end products. Kelemen’s dimensions In the book Managing Quality by Mihaela Kelemen, the author has provided insight upon the impor tance of quality management on the basis of eight important approaches which are divided into two important categories. The categories are mainly the managerial and the critical perspectives of the quality management approaches. These perspectives and approaches are considered to be an extended view of Garvin’s framework in quality management. However, the approaches developed by Kelemen were seen to incorporate the notions provided by different, authors. Writers were also seen to support more than one particular approach.