FIN350- “Bond Markets” and “Bond Valuation and Risk”

From the first e-Activity, analyze how the Federal Reserve’s decision to keep interest rates low through late-2014 affects the bond market and determine if you are in agreement with this strategy. (Go to the MSN Money Website to read the news transcript titled “ Investing lessons from the 1950s,” dated February 21, 2012, located at http://money.msn.com/mutual-fund/investing-lessons-from-the-1950s-wsj.aspx.)

Describe the relationship between the bond rate and inflation. Then, apply this relationship to advise a small-business owner who wants to start a pension fund for his / her employees. (Students are to provide their own details about the type of small business and employees of that business.) 

Recommend a bond strategy for risk-tolerant and risk-adverse investors. Describe the key factors you considered when preparing the strategy. Discuss a strategy to incorporate international bonds in your portfolio. If you don’t already have a portfolio, pretend you are about to start one.