The investment characteristics of amortizing securities

Assignment Help Financial Management

Reference no: EM131022039

Two portfolio managers are discussing the investment characteristics of amortizing securities. Manger A believes that the advantage of these securities relative to nonamortizing securities is that because the periodic cash flows include principle repayments as well as coupon payments, the manager can generate greater reinvestment income. In addition, the payments are typically monthly so even greater reinvestment income can be generated. Manager B believes that the need to reinvest monthly and the need to invest larger amounts than just coupon interest payments make amortizing securities less attractive. Whom do you agree with and why?

Reference no: EM131022039

Questions Cloud

Prepare powerpoint that break down amazons inventory control : Prepare a powerpoint thats breaks down Amazon's. Inventory Control and Materials Management: Logistics (IT) Management System.

Affect blood streaming leading to death : Which air pollution can affect blood streaming leading to death?

Mutual fund returns : Mutual Fund Returns (LO2, CFA1) You invested $10000 in a mutual fund at the beginning of the year when the NAV was $32.24. At the end of the year the fund paid $.24 in short - term distributions and $.41 in long - term distributions. if the NAV of th..

Calculate the missing amounts for each firm : Calculate the missing amounts for each firm.

The investment characteristics of amortizing securities : Two portfolio managers are discussing the investment characteristics of amortizing securities. Manger A believes that the advantage of these securities relative to nonamortizing securities is that because the periodic cash flows include principle rep..

Who are your existing and potential customers : Who are your existing and potential customers (target market)? What are the needs of your target market, as identified through market research?

Difference between an arrest warrant and a search warrant : Why do you think a search warrant requires probable cause that the items to be seized are in the location to be searched, but an arrest warrant does not have the same requirement?

World income appreciation found has current assets : Net Asset value (LO2, CFA2) The World income Appreciation Found has current assets with a market value of $8.5 million shares outstanding. What is the net asset value (NAV) for this mutual fund?

Why imposing price controls on goods make them hard to find : According to an article in the New York Times, the Venezuelan government "imposes strict price controls that are intended to make a range of foods and other goods more affordable for the poor. They are often the very products that are the hardest ..

User Account

All Pages