Is this portfolio fully immunized

Assignment Help Financial Management

Reference no: EM132034991

Tomorrow Financial Associates is required to make a $500,000 payment in exactly four years. To cover this liability, they have purchased a two-year zero-coupon bond with redemption amount $343,398.73 and a ten-year zero-coupon bond with redemption amount $162,782.52. We assume that there is a flat yield curve and that the current interest rate is 4.5%. Is this portfolio fully immunized? In on year, will it be fully immunized? What will the surplus be if the interest rates rise immediately to 8%? What will the surplus be in one year if interest rates are 8%?

Excel May Be Used, Please Upload Excel Picture if used.

Reference no: EM132034991

Questions Cloud

Example of side cost or benefit for investment analysis : Which of the following is considered to be an example of a side cost or benefit for investment analysis?

Help the sales person close deals : What traits and behaviors would an ethical sales person possess and how might this help the sales person close deals?

Describe at least two backup strategies : Describe and discuss at least two backup strategies. Discuss the use of cloud backup strategies, as well? The response must be typed.

What is meant by the term creative destruction : What is meant by the term "creative destruction"? This term was first used by the 19th-century Austrian economist Joseph Schumpeter.

Is this portfolio fully immunized : We assume that there is a flat yield curve and that the current interest rate is 4.5%. Is this portfolio fully immunized?

Brand structured approach or unstructured approach : What is the best easy to position a brand structured approach or unstructured approach?

Discuss about the organizational cooperation : Content: Each suggested topic below should be a Heading 2 paragraph (You should have at least 6 topics) Organizational Cooperation?

Calculate what the break-even would be for the case : Calculate what the break-even would be for the case given the following information:

Discuss the internal-external and environmental risks : Briefly discuss the internal, external, and environmental risks, which might be likely to affect the business and result in loss of the facility, loss of life.

User Account

All Pages