FIN203 Relationships Between Budget Balance And Yield Curve Assessment Answer

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Question :


Use graphs, tables, and statistical summaries to evaluate the relationships between the budget balance, yield curve, cash rate and exchange rates.

Task Details

Obtain the following macroeconomic data for Australia for the period 2001-2020: the yield for Commonwealth Government securities, the budget balance, and the cash rate and 90-day and 180-day rates

  1. Evaluate the fiscal position (i.e. budget balance) of the Australian Federal Government for the period 2001-20. Briefly describe how you expect this to move over time.
  2. Plot the current Australian yield curve for Commonwealth Government Securities (CGSs). At a minimum you should include the target cash rate, 90-day and 180-day rates, and the 2, 3, 5, and 10-year rates. Explain the shape of the yield curve (apply your knowledge of the Expectations and Segmented Market theories.)
  3. Examine the impact of the fiscal position identified in (1) to influence the yield curve.
  4. Given your insights from (1) – (3), recommend to the Australian government financial and fiscal policies that could make Commonwealth Government Securities more attractive to investors.

Students need to support their analysis with reference from text and a minimum of six (6) suitable, current and academically accepted sources -check with your tutor if unsure of your sourcesStudents seeking Credit or higher grades should support their analysis with increased number of reference sources consistent with the grade they are seeking.

Every page should clearly be numbered, and the assignment organised as follows:

  1. A KOI Cover Sheet for an Individual Assignment.
  2. A title page, which indicates Subject title, Subject Code, Trimester number, Assignment title, your full name and KOI student number, word count and Tutor’s name.
  3. Executive Summary
  4. Table of Contents
  5. Body (main contents  each to be a separate numbered section).
    • Introduction
    • Research  literature review
    • Analysis  this is the major part of your assignment and requires numbered sub-sections
      • Recommendations
      • Conclusion
  6. References
  7. Appendices
  8. A Turnitin validation page showing the Similarity score for your assignment
  9. A copy of the Marking Rubric
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Answer :

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