Accurate result of bond price alteration

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Reference no: EM132018964

1. In which cases is duration sufficient to give us an accurate result of a bond price alteration? Why?

2. Assume that U.S. and British investors require a real return of 2.2 %. If the nominal U.S. interest rate is 11.7 %, and the nominal British interest rate is 8.1 %, what is the expected rate of inflation in the U.S.?

3. Explain the interaction between pension funds and the following financial institutions: a) Commercial bank b) Insurance companies c) Mutual funds.

Reference no: EM132018964

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