Estimate the new portfolio value

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Reference no: EM131566402

a. A bond portfolio is currently worth $500,000. It has a duration of 10.1 years. Next month, the interest rate increases by 0.3%, Estimate the new portfolio value. (margin for error: +/- 1,000)

b. Price a 2-yr 7% semiannual coupon bond with a par value of $1,000 and the yield to maturity (discount rate) is 5% per annum with semiannual compounding.

Reference no: EM131566402

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