Federal reserve system is considering end to easy money

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Reference no: EM131921086

The economic outlook has been more favorable lately, and the Federal Reserve System is considering an end to “easy money”, i.e. an end to its policy of injecting money in the economy (by buying back Treasuries). As a result, you expect interest rates to increase in the near future.

Devise a numeric example that shows how, by changing the percent of money allocated to each of the three notes, you could lower the duration of your portfolio even further and partly mitigate losses in your portfolio that would result from increased yields.

Reference no: EM131921086

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