Define the time value of money principle

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1. You have a portfolio of bonds with an average duration of 5.25 and an average discount rate of 5%. What is the approximate value of the $3 million portfolio if rates rise or fall 50 basis points?

2. Define the time value of money principle, explaining how it works, and construct at timeline for the following: You must pay off a loan for a new car of $18,000 over the next 3 years.

Reference no: EM132006044

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