FINC3340-Financial Markets and Institutions

Assignment
Part1
Financial Crisis You have been retained by the risk management group in SHB-Brooklyn Capital Management, LLC. On Dec. 03 2018 the U.S. Treasury yield curve just inverted for the first time in more than a decade. The spread between 3- and 5-year yields fell to negative 1.4 basis points on that day, dropping below zero for the first time since 2007. Because it is not a positive signal to the U.S. economy. Your boss believes that it is good time to refresh important lessons learned from the financial crisis 2017 prior to encounter another financial disaster in near future. Your boss asks you to speak one the following two topics in an in-house seminar for employees on Dec 20, 2018 , 06:00 pm – 8:00 pm. The two topics that he would like you to cover are: 1) “What Caused the Global Financial Crisis”, and 2) “Securitization and the credit crisis of 2007’. Thus, you are now preparing one two presentation files (using MS powerpoint) to cover these topics.
Feel free to select one of them and prepare a ppt file following the below instruction.
1. To prepare the first presentation for “What Caused the Global Financial Crisis’, read an article “ The Financial Crisis of 2007-2009: Causes and Remedies” that I posted to Blackboard. Make a PPT file. 
2. For the second presentation about “Securitization and the credit crisis of 2007”, read Chapter 8 in John Hull’s textbook and make presentation slides.
Part2
Yield Curve Analysis, Nelson-Siegel-Svensson Model (NSS), and Bond Pricing The CEO of SHB-Brooklyn Capital Management asks you 1) to analyze the term structure of yields; 2) price a 4% semi-annual coupon bond maturing in 8 years. To price the corporate bond, you need to implement a Nelson-Siegel-Svensson model following the below steps. 1
1. Find daily treasure yield curve rates on 12/04/2017 using Daily Treasury Yield Curve Rates provided by the US Department of Treasury1 and report those daily rates (i.e., 1 Month, 3 Month, 6 Month, 1 Year, 2 Year, 3 Year, 5 Year, 7 Year, 10 Year, 20 Year, 30 Year) and plot the yield curve. Note that all the yield curve rates are continuously compounding interest rates.
2. Download daily treasure yield curve rates on 12/03/2018 from the US Department of Treasury and report those daily rates (i.e., 1 Month, 3 Month, 6 Month, 1 Year, 2 Year, 3 Year, 5 Year, 7 Year, 10 Year, 20 Year, 30 Year) and plot the yield curve.
3. Download daily treasure yield curve rates on 12/03/2019 from the US Department of Treasury and report those daily rates (i.e., 1 Month, 3 Month, 6 Month, 1 Year, 2 Year, 3 Year, 5 Year, 7 Year, 10 Year, 20 Year, 30 Year) and plot the yield curve.
4. Analyze each shape of the yield curves from problem 1 to problem 3 and compare them. What is your findings? Provide your thoughts about market expectations as of 12/04/2017, 12/03/2018, and 12/03/2019.