management project.docx - YIELD CURVE SHAPES A CASE STUDY...

This preview shows 1 out of 6 pages.

YIELD CURVE SHAPES: A CASE STUDY IN KENYA By: Libra Ezekiel A MANAGEMENT RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE BACHELOR OF ECONOMICS AND FINANCE, UNIVERSITY OF NAIROBI. 2015 DECLARATION This research project report is our original work and has never been presented for the award of degree in a University. This project report has been submitted with my approval as the University supervisor.
Image of page 1

Subscribe to view the full document.

2 Sign:…………………………………………………Date: …………………………… MR. DEPARTMENT OF APPLIED SCIENCE SCHOOL OF ECONOMICS UNIVERSITY OF NAIROBI DEDICATION To our beloved parents. ACKNOWLEDGEMENT First, we thank our almighty God who gave us the strength to work, good health and for His continued blessings and guidance in accomplishing this work. Secondly, we are deeply indebted to our family and classmates for the moral and intellectual support they offered us in one way or the other throughout our study period. Without their support, encouragement, and value for education, we could not have succeeded in our research study. We also acknowledge the people whose assistance directly or indirectly facilitated the completion of this proposal. We wish to extend special thanks to our supervisor: for his helpful
Image of page 2
3 guidance during the preparation and completion of this thesis. He was of great importance and mentorship and his insightful and useful comments, ideas, points helped in clarifying the focus and direction of our work. Without his encouragement, patience, support, and strictness when needed, we would never have completed this work. Our appreciation also goes to the World Bank for providing us with the data we needed for the study of this project. Plus all those who in one way or the other offered their invaluable time and ideas but we could not mention here because of space. We say thank you for the unlimited and kindly support during our study and life. TABLE OF CONTENTS DECLARATION ........................................................................................................................... ii DEDICATION .............................................................................................................................. iii ACKNOWLEDGEMENT ........................................................................................................... iv LIST OF TABLES ....................................................................................................................... vii LIST OF FIGURES ...................................................................................................................... ix LIST OF ABBREVIATIONS ........................................................................................................ 1 ABSTRACT .................................................................................................................................. xi CHAPTER ONE: INTRODUCTION .......................................................................................... 1 1.1 Background ............................................................................................................................ 1 1.2 Movement of Yield Curve ...................................................................................................... 2 1.2.1 The Kenyan Scenario ...................................................................................................... 4
Image of page 3

Subscribe to view the full document.

4 1.3 Overview of Yield Curve Shapes ........................................................................................... 5 1.4 Patterns of Yield Curves and their Implications ..................................................................... 6 1.4.1 Flat ................................................................................................................................... 7 1.4.2 Upward Sloping/Normal ................................................................................................. 8 1.4.3 Downward Sloping/Inverted ........................................................................................... 9 1.5 Problem Statement ............................................................................................................... 11 1.6 Objectives of the Study ........................................................................................................ 11 1.7 Significance of the Study ..................................................................................................... 12 CHAPTER TWO: LITERATURE REVIEW ........................................................................... 14 2.1 Introduction to Theoretical Review ..................................................................................... 14 2 . 2 Theories of the Term Structure of Interest Rates ................................................................. 14 2.2.1 Expectations Hypothesis ............................................................................................... 14 2.2.2 The Segmented Market Theory ..................................................................................... 17 2.2.3 The Liquidity Premium Theory ..................................................................................... 18 2.3 Theoretical Behavior of the Term Structure and Economic Activity ................................... 19 2.4 Empirical Review ................................................................................................................. 20 2.5 Conclusion ........................................................................................................................... 23 CHAPTER THREE: RESEARCH METHODOLOGY .......................................................... 24 3.1 Introduction .......................................................................................................................... 24 3.2 Research Design ................................................................................................................... 24 3.3 Target Population ................................................................................................................. 24 3.4 Data Collection .................................................................................................................... 25 3.5Data Analysis ........................................................................................................................ 25
Image of page 4
5 CHAPTER FOUR: DATA ANALYSIS ...................................................................................... 29 4.1 Introduction .......................................................................................................................... 29 4.2 Descriptive Analysis ............................................................................................................ 29 4.2.1 Descriptive Statistics ..................................................................................................... 29 4.2.2 Yield Curve .................................................................................................................... 31 4.2.3 Comparison Yield Curve and Real GDP Growth Rate
Image of page 5

Subscribe to view the full document.

Image of page 6
You've reached the end of this preview.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern