The yield curve is flat and all yields are 5 assume all

Assignment Help Finance Basics
Reference no: EM13568810

A portfolio consists of two zero coupon bonds, each with a current value of $10. The first bond has a modified duration of one year and the second has a modified duration of nine years. The yield curve is flat, and all yields are 5%. Assume all moves of the yield curve are parallel shifts. Given that the daily volatility of the yield is 1%, which of the following is the best estimate of the portfolio daily VAR at the 95% confidence level?

A. USD 1.65

B. USD 2.33

C. USD 1.16

D. USD 0.82

Reference no: EM13568810

Questions Cloud

What do you expect some of the differences will be between : 75 words apa formatsummarize these resources in one sentences each.what do you expect some of the differences will be
Temporary changes in the value of securities after : temporary changes in the value of securities after purchase would not be recorded for which two types of securities?no
Elimination of product c will make it possible to cut two : mr. earl pearl accountant for margie knall co. inc. has prepared the following product-line income
According to the pure expectations hypothesis which of the : according to the pure expectations hypothesis which of the following statements is correct concerning the expectations
The yield curve is flat and all yields are 5 assume all : a portfolio consists of two zero coupon bonds each with a current value of 10. the first bond has a modified duration
Birk camera shop inc uses the lower-of-cost-or-market basis : birk camera shop inc. uses the lower-of-cost-or-market basis for its inventory. the following data are available at
The one-year us dollar interest rate is 275 and one-year : the one-year u.s. dollar interest rate is 2.75 and one-year canadian dollar interest rate is 4.25. the current usdcad
Mateo inc had the following inventory situations to : mateo inc. had the following inventory situations to consider at january 31 its year-end. agoods held on consignment
Write an essay comparing william f buckley jr william f : write an essay comparing william f. buckley jr william f. buckley jr.s why dont we complain? and barbara aschers on

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the total value of icarus

Thereafter, operating cash flows and investment expenditures are forecast to grow by 2% a year.

  How does pre-tax wacc for a company change with the

how does the pre-tax wacc for a company change with the following - 1. increase in amount of debt 2. increase in

  Determine the net present value of the laser

Determine the net present value of the laser if the intial investment increases to $250,000?

  Would you expect that a technology firm or a utility firm

would you expect that a technology firm or a utility firm would have a higher priceearnings

  How much money should she invest in each stock

Suppose that the expected returns of Jazz, Classical, and Rock are 10%, 6%, and 12%, respectively. An investor who has $10,000 wants to achieve an expected return of 40%. How much money should she invest in each stock and the risk-free security?

  What is the npv of this project

If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project?

  How much will he have to save each month

He can afford to save $4,100 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

  Issues set out in the assignment

Assignment requires you to address the issues set out in the assignment. The task is to be done in group of TWO (2). The assignment has two parts, A and B. Part A requires you to set up a company and process a number of transactions using MYOB.

  How large a sales increase can the company achieve

Bannister's profit margin is 5% and its payout ratio is 60%. How large a sales increase can the company achieve without having to raise funds externally?

  An external adviser of a chinese chemical firm

Assume that you are an external adviser of a Chinese chemical firm which produces in Korea for a market in France. The firm uses a range of inputs, crude oil and energy being amongst them.

  How much total cost would be allocated to the assembly

How much total cost would be allocated to the Assembly activity cost pool?

  How much cash is available also you must meet a payroll

Elucidate how much cash is available also you must meet a payroll of $100,000 in 2 days. Where would you start.

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!

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