Alpha Geek

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Category > Accounting Posted 27 May 2017 My Price 5.00

You are managing a portfolio of $2.9 million

You are managing a portfolio of $2.9 million. Your target duration is 14 years, and you can choose from two bonds: a zero-coupon bond with maturity 5 years, and a perpetuity, each currently yielding 5%.

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=___________%

Answers

Alpha Geek
(8)
Status NEW Posted 27 May 2017 06:05 PM My Price 5.00

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file 1495910577-Answer.docx preview (180 words )
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