Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Financial institutions must have the assets available to cover liabilities when they arise. Many types of liabilities are known in advance. It is therefore possible to set up investments, like bonds, so that the inflow of cash from the bonds will match the outflow needed to cover the liabilities due at each point in time. This strategy is called "duration matching" or "immunization."
(a) A company has a $20,000 liability (payment to be made) due at the end of year 2. It can purchase 2-year zero coupon bonds at 9% spot rate. What is the cost of financing your liability by holding the 2-year bond that would pay $20,000?
(b) Recall that the formula for modified duration is D* = D/(1+r), where D is the duration. Also know that the modified duration of a portfolio of assets is the weighted average of the modified durations of the underlying assets where the weight is the portfolio weights on the assets. How can you invest in only the 1-year zero-coupon bond and 3-year zero coupon bond to match the modified duration of the 2-year zero-coupon bond?
Your company will generate $66701 in annual revenue each year for the next 5 years from a new information database. If the appropriate interest rate is 8.1.
trigen corp. management will invest cash flows of 905963 529350 1038985 818400 1239644 and 1617848 in research and
A bank offers one-year loans with a stated rate of 6.5 percent, charges a 1/2 percent loan origination fee, imposes a 10 percent compensating balance.
If this year's year-end dividend is $11 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM?
Discuss any significant disadvantages that you would expect in issuing a high coupon bond - If Tangential wishes to pay US dollars and not Japanese Yen, what can the company do? Illustrate and analyse your answer with diagrams showing the cash flo..
1. Does this company carry long-term debt on their balance sheet? 2. What is the company's debt-to-equity ratio, and debt ratio?
Why might a foreign government's policies be closely monitored by investors in other countries, even if the investors plan no investments in that country?
Can the recommended offering price of $28 per share for Netscape's stock be justified? In valuing Netscape, make the following assumptions:
executives of the donut shop have determined that the company s dol is 3x and its dfl is 6x. according to this
Why have VARs become popular for application in economics and finance? Discuss any weaknesses you perceive in the VAR approach to econometric modelling.
Why is the 15-year mortgage attractive to homeowners? - Is the interest rate risk to the financial institution higher for a 15-year or a 30- year mortgage? Why?
currency swaps interest rate swaps with alternative debt issues.ashton bishop is the debt manager for world telephone
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd