Appropriate amount of the selected bonds on stock-track

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For this assignment, you will construct a bond portfolio for a client and purchase the appropriate bonds. Instructions: You have a client that wants you to build them a bond portfolio that has no default risk and a target date of 13 years. (Their 5-year old child will attend college in 13 years. You are responsible for their college savings.) The client wants to invest SI,000,000 into this portfolio. (This money will hopefully be just enough to pay for 4 years of tuition & living expenses at a good private school in 13 years.) Make sure you are you choosing default-free investments. Calculate the effective duration of your portfolio. (Make sure it fits the client's specifications.) Estimate the YTM of the bond portfolio. (You may assume the yield curve is a straight line.) Estimate the future value of the investment in 13 years assuming the YTM will be the realized yield. Purchase the appropriate amount of the selected bonds on Stock-track.

Reference no: EM131012925

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