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Below are details of a semiannual bond. Please show work in Excel spreadsheet.Par value = 1000; Maturity 4 years; Market rate if interest (yield to Maturity) = 11% per annum; Coupon rate = 8% per year paid semiannually. a. Find the Duration, modified duration, and Convexity of the bond. Explain the meaning and importance of the concept of duration? What is meant by the term convexity with respect to bond prices? b. If the yield changes by 1 % what will be the change in price and what will be new price?c. Also calculate the delta and the gamma. d. Which one is a better measure of predicting price change--duration or convexity-- and why?
A portfolio has 25 percent of its funds invested in Security C and 75 percent of its funds invested in Security D. Security C has an expected return of 8 percent and a standard deviation of 6.
Suppose that transaction costs are zero, there are no barriers to trade and that Chinese products are identical to British items, would you expect the Yuan to appreciate,
What is the value of ratio for FY 2011 and does the ratio you calculated in part (b) compare favorably or unfavorably to the rule of thumb for this ratio? Write "none" if there is no rule of thumb.
Suppose last week, you bought a call option on Denver, Inc. stock at an option price of $1.05. The stock price last week was $28.10. The strike price is $27.50.
Percival Hygiene has $10 million invested in long-term company bonds. This bond portfolio's expected annual rate of return is 9%, and the annual standard deviation is 10%.
Find out the present value of following three year cash-flow stream if your interest rate is 6%.... Year 1 $200, Year 2 $400 Year 3 $300 ?
Computation of share price that affected by acquisition and expect to happen to the Financial architecture of corporations in these countries over the decade
Nico purchsed 100 shares of Cisco Systems stock for $24.00 per share on January 1, 2002. He received a dividend of $2.00 each share at the end of 2002 and $3.00 each share at the end of 2003
Computation of NPV of the project option and evaluation and you are considering a project which has been assigned a discount rate of 8%
The upgrade will cost the firm a combined total of $23,000,000 up front, but will lower operating expenses by 4,400,000 per year forever. The company is facing a 38 percent tax rate.
What would be the value of this bond if interest rates fall to 5% the day after it is purchased? If interest rates fell to 5% after one year, what would the bond be worth at that point?
Purpose a paper with an emphasis on financial management on the topic of Corporate Governance
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