Bezier Curve in Modeling Bonds Yield Curve
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Abstract
Before buying bonds, investors must ensure that the bonds chosen by investors have good prospects and can provide profits as expected, so investors must analyze the yield curve. The results of yield curve analysis will help investors to model the yield curve and help make decisions about investing in certain bond products. Bond yield curves can be modeled using Bezier curves. The Bezir curve was chosen because the Bezier curve has a control value which functions to direct the points on the curve to move from the starting point to the ending point. The more control values, the more complex the bezier curve formed will be and the bezier curve can be adjusted to real data. This study compares high order Bezier curves (6th order) with low order Bezier curves (5th order). The results of the research show that the Bezier order 6 curve has a smaller error compared to the Bezier order 5 curve. More control values on the order 6 Bezier curve make the curve move more complexly and adapt to real bond yield data.
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