How much of each bond will you hold in your portfolio

Assignment Help Financial Management

Reference no: EM13922210

You are managing a portfolio of $1.9 million. Your target duration is 13 years, and you can choose from two bonds: a zero-coupon bond with maturity 6 years, and a perpetuity, each currently yielding 8%. a. How much of each bond will you hold in your portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond % Perpetuity bond % b. How will these fractions change next year if target duration is now thirteen years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Zero-coupon bond % Perpetuity bond %

Reference no: EM13922210

Questions Cloud

Methods of treatment work best to reduce recidivism : Write an essay explaining what methods of treatment work best to reduce recidivism among juveniles. Include your own individual seven-point plan detailing what kind of prevention program you think will work to prevent juveniles from coming into co..

About the bond market analyst forecasts : A 30-year maturity bond has a 9% coupon rate, paid annually. It sells today for $897.42. A 20-year maturity bond has a 8.5% coupon rate, also paid annually. It sells today for $909.5. A bond market analyst forecasts that in five years, 25-year maturi..

Problem regarding the conflict management report : The workplace can be an especially stressful environment. Personal conflicts between coworkers, fear of layoffs, and heavy workloads can be causes of negative stress. This stress can be carried to our homes and after-work activities

Example of the sexual double standard : An example of the sexual double standard is that men are expected to be _____ while women are expected to be ______.

How much of each bond will you hold in your portfolio : You are managing a portfolio of $1.9 million. Your target duration is 13 years, and you can choose from two bonds: a zero-coupon bond with maturity 6 years, and a perpetuity, each currently yielding 8%. a. How much of each bond will you hold in your ..

Increases the unit contribution margin : A product has a contribution margin of $9 per unit and a selling price of $20 per unit. Fixed costs are $27,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $21,600, what is the new ..

Write a current apa-style results section : rite a current APA-style Results section based on your analyses. All homework "Results sections" must follow the example given in the SPSS tutorials and the Course Content document "Writing Results of Statistical Tests in APA Format" (note: you do..

Noncallable bond with an annual coupon rate : Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 10.8% nominal yield to maturity on this ..

What would risk-free rate have to be for two stocks : Stock Y has a beta of .99 and an expected return of 8.33 percent. Stock Z has a beta of .90 and an expected return of 8 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

User Account

All Pages