A DEBT SELECTION MODEL FOR BANKS OF THE COOPERATIVE FARM CREDIT SYSTEM

Loren W. Tauer and Michael Boehlje

Western Journal of Agricultural Economics, 1981, vol. 06, issue 2, 14

Abstract: This article discusses the application of a quadratic programming model to the bond and note participation decision of a Cooperative Farm Credit Bank. The model generates an efficient frontier of bond and note portfolios from which a bank can choose. The composition of these portfolios depends upon the expected cost and variance-covariance of cost for the bond and note activities, debt needs, and the debt policy constraints of a bank. The results indicate that the interest rate risk of various bond and note issues should be considered when making debt participation decisions.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 1981
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Persistent link: https://EconPapers.repec.org/RePEc:ags:wjagec:32581

DOI: 10.22004/ag.econ.32581

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