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bond

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Question

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 changenext 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

 
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duration of a bond

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Question

Find the duration of a bond with settlement date June 9, 2016, and maturity date December 11, 2025. The coupon

rate of the bond is 8%, and the bond pays coupons semiannually. The bond is selling at a yield to maturity of 9%. (Do not round intermediate calculations. Round your answers to 4 decimal places.)

  Macaulay duration. ________

Modified duration. ______

 
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coupon bond

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Question

Find the convexity of a seven-year maturity, 6.2% coupon bond selling at a yield to maturity of 7.7%. The bond

pays its coupons annually. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Convexity

 
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There is money to send four style

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Question

There is money to send four style=”color:rgb(0,0,0);”> of nine city council members to a conference in Honolulu. All want to go, so they decide to choose the members to go to the conference by a random process. How many different combinations of four council members can be selected from the nine who want to go to the conference?

 
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