User Account

All Pages

Achieve the minimum acceptable return

Assignment Help Finance Basics
Reference no: EM132417263

You manage a portfolio and are instructed to ensure you have at least $350,000 at the end of 6 years. The current value is $250,000. You can invest at the current interest rate of 8%. You have decided to use a contingent immunisation strategy.

  • What amount would need to be invested today, given the current interest rate?
  • Suppose 4 years pass, and the interest rate rises to 9%. What is the trigger point for the portfolio at this time? (That is, how low can the value of the portfolio be before you will be forced to immunise to ensure you achieve the minimum acceptable return).
  • Finally, if the portfolio's value after 4 years is $291,437, what should you do?

Reference no: EM132417263

Questions Cloud

Concepts of business driven management information systems : Concepts of Business Driven Management Information Systems (MIS) and Value Driven Business.
Case study of bullock gold mining : Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.
Real estate investment strategy : Last month, my good friend Mike was telling me about his real estate investment strategy. He said that he is thinking of buying a condo on the Seattle
Value of the swap to the party paying sterling : What is the value of the swap to the party paying sterling? What is the value of the swap to the party paying dollars?
Achieve the minimum acceptable return : The current value is $250,000. You can invest at the current interest rate of 8%. You have decided to use a contingent immunisation strategy.
What is the implicit interest cost of demand deposits : What is the implicit interest cost of demand deposits for the FI?
What does it mean when you write option : What does it mean when you write option? In what situation would you want to write call? In what situation would you want to write put?
What is the amount of each monthly repayment : The current interest rate is 12 per cent per annum, compounded monthly. What is the amount of each monthly repayment?
Determining the operating cash flow : The incremental taxes are $23,310 and incremental depreciation is $17,370. What is the operating cash flow?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd