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FHEQ Level 6
Assessed Summative Assignment Fixed Income (6FIX)
Please Note: Your script will be subject to a process of internal moderation.
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Assessed Summative Assignment
Required:
“Investors, business owners and consumers should be heeding the message that the inverted yield curve is sending, according to the researcher who pioneered the economic forecasting model.
“Duke University professor Campbell Harvey said people shouldn’t wait for the economic downturn he anticipates before taking preventive measures.
“This is the time where you need to reflect upon your strategy. It’s actually easy to manage assets when the economy is booming. It’s much more difficult to manage into a turning point,” Harvey told [CNBC].” CNBC 2019
(a) Explain what a yield curve represents and the forms it can take. What does an inverted yield curve mean and what are the implications for investors?
(b) Outline the risks to fixed income investments that result from an inverted yield curve. Critically assess these risks for different types and qualities of investment.
(c) What “preventative measures” would be appropriate for investors in fixed income to take? Recommend a fixed income strategy appropriate to this scenario.
Word count: Maximum 4,000 words including quotations and in-text citations.
Guidance materials
The following resources are available to assist you with your assignment preparation. They can all be found through your course website:
• Guide to referencing – Note: It is important that you familiarize yourself with all elements of this guidance; • Module specification; • Student handbook; • Guidance for how to approach your assignment – in the study skills area; • Submission information; and • Understanding your similarity report. The following reading section is provided as a pointer to students in starting their research, which should be much broader than the guidance articles suggested. Although the examiners take every care in providing relevant articles and the links are
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checked before release of the assignment, we are not able to guarantee that a link will remain viable for the duration of the research phase of the assignment. The readings may be specific, for example, a journal article or a chapter of a book or more general, in terms of a whole book where you are required to determine key areas that link to your assignment and use this as a basis to broaden your own independent research.
Recommended reading: Bodie, Kane & Marcus (2017) Essentials of Investment. 9 th Ed. New York: McGraw Hill. Available in print in the Henry Grunfeld Library.
The following references can be accessed via KnowledgeBank: https://kb.libf.ac.uk/module-readings/ft-assessment-readings-2019-20/fixed-income(6fix)-asa
Barret, E. (2019) Investors torn between following Fed or trusting Bond traders. Bloomberg [online].
Choudhry, M., Moskovic, D. and Wong, M. (2014) Fixed income markets: management, trading and hedging. 2nd edn. Singapore: Wiley, ProQuest Ebook Central [online].
Fabozzi, F. (2012) The Handbook of fixed income securities. 8 th edn. New York: McGraw Hill, ProQuest Ebook Central [online].
Lim, P. (2018) This is the market tumble you should really worry about. Money, April 2018, 47(3), p30-30, EBSCOhost Business Source Corporate Plus [online].
If you need any help accessing any of these references, please contact knowledgebank@libf.ac.uk KnowledgeBank, your e-library, is a collection of resources available to students and is accessible through https://my.libf.ac.uk
You should use this e-library to find additional books, journal articles and other information to support your studies. To begin your search:
• log in to https://kb.libf.ac.uk with your LIBF number and password; • select ‘Library Resources’ from the link on the right of the home page.