Explain to Jayden what are Singapore Government Securities (SGS) and the difference between SGS bond and T-bills?. [ad_1]
Based on the information provided along with the question and knowledge in this course, please answer the following 5 questions
|“Singapore Exchange (SGX) announced the listing of the world’s largest Chinese pure government bond exchange-traded fund (ETF) for investors to access opportunities in China’s onshore bond markets.
Loh Boon Chye, chief executive officer of SGX, said in a statement, “Global fixed income investors have been turning to Chinese sovereign bonds for added diversification and yields, and this product is a strong addition to our platform. SGX will continue to work with issuers and business partners to develop a multi-asset ETF product shelf that meets the demands of the investment community.””
Source: Nikkei Asia
You are a fixed income securities Manager and Jayden is your friend. He read the news and think the government securities is a good investment and he approached you for help.
- Explain to Jayden what are Singapore Government Securities (SGS) and the difference between SGS bond and T-bills?
- One of the primary purposes of SGS market is to provide a benchmark yield curve for corporate debt market. If the zero-rate cure is given as follows, calculate forward interest rates for the second years.
|Date||1 Mo||3 Mo||6 Mo||1 Yr||2 Yr||5 Yr||10 Yr|
- Assume the following 2-year SGS bond will be issued in Feb 2021, using the term sheet to calculate and explain the duration of this SGS Bond. Suppose the bond yield is continuous compounding.
|Maturity Date||01 Feb, 2023|
|Coupon||1.75% per annum paid semi-annually in arrears on the Face Value of the bonds.|
|Coupon Payment Dates||01 Feb and 01 Aug in each year|
|Denominations||$100 Face Value for Treasury Bonds|
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