Find the duration of the remaining half of the portfolio

Assignment Help Financial Management
Reference no: EM13879680

The duration of the portfolio is 8.75 years. A quarter of that portfolio is invested in a bond with a 5 year duration. Another quarter of the portfolio is invested in a bond with 10 year duration. Find the duration of the remaining half of the portfolio

Reference no: EM13879680

Questions Cloud

Formulate this as an lp : Assume that the farmer works to maximize net revenue (gross revenue minus vari- able costs) from the production of these four crops. Formulate this as an LP.
What is the dollar amount of income : London purchased a piece of real estate last year for $85,900. The real estate is now worth $102,000. If London needs to have a total return of 0.23 during the year, then what is the dollar amount of income that she needed to have to reach her object..
Corporate taxes and financial distress costs apply to firm : Assume both corporate taxes and financial distress costs apply to a firm. Given this, the tradeoff theory of capital structure illustrates that
The irr does not take account of the time value of money : One defect of the IRR method vs. the NPV is that the IRR does not take account of cash flows over a project’s full life. One defect of the IRR method vs. the NPV is that the IRR does not take account of the time value of money. One defect of the IRR ..
Find the duration of the remaining half of the portfolio : The duration of the portfolio is 8.75 years. A quarter of that portfolio is invested in a bond with a 5 year duration. Another quarter of the portfolio is invested in a bond with 10 year duration. Find the duration of the remaining half of the portfo..
Applying rituals in diverse contexts : Discussion: Applying Rituals in Diverse Contexts. Rituals vary from family to family based on general cultural influences as well as cultural factors within the family
What will be the net gain and loss for the investor : The September T-bond futures contract is currently selling at 111-05 and September call option on T-bond futures for a strike price of 115-00 is currently quoting at 2-24. If an investor purchases one contract of the call option at the current market..
Formulate this decision problem as an lp model : The total production capacity of the ice cream maker's plant is 10,000 gallons per month. He also knows that he can only sell 1,000 gallons of super-super premium mocha chip, and he must produce at least 2,500 gallons of chocolate ice milk for the..
What is the marked-to-market gain and loss for the investor : An investor purchases one September T-bond futures contract at 115-110. The settlement price for the contract on next day is 117-225. What is the marked-to-market gain/loss for the investor? (Please provide explanation with answer)

Reviews

Write a Review

Financial Management Questions & Answers

  Why is it important to investors and issuers of stock

What is β and why is it important to investors and issuers of stock? Describe the behavior of stocks with βs of greater than one, less than one, and less than zero.

  What is the expected return on the portfolio

You own a portfolio that is 32 percent invested in Stock X, 20 percent in Stock Y, and 48 percent in Stock Z. The expected returns on these three stocks are 6 percent, 19 percent, and 15 percent, respectively. What is the expected return on the portf..

  Bond equivalent yield and the effective annual return

A treasury bill with 64 days to maturity is quoted at 99.012. what is the bank discount yield, the bond equivalent yield and the effective annual return?

  Mutual fund at the beginning of the year

You invested $10,000 in a mutual fund at the beginning of the year when the NAV was $32.24. At the end of the year the fund paid $0.24 in short-term distributions and $0.41 in long-term distributions. If the NAV of the fund at the end of the year was..

  Financial ratio becomes more important to analyze

At the end of the growth phase the following financial ratio becomes more important to analyze

  Interests were affected by hidden obsolete inventroy

Before finalizing these plans, two stores were remodeled as a test. Lisa Lee, assistant controller, was asked to oversee the financial reporting for these test stores, and she and other management personnel were offered bonuses based on the sales gro..

  What is expected return on the market and the risk-free rate

You have been given the following information on two corporations; you are to assume that the securities are correctly priced. My Corp, Inc. has a Beta of 1.25 and an Expected Return of .145; Your Corp, Inc. has a Beta of .75 and an Expected Return o..

  Calculate the sustainable growth rate

PING, INC. projects a rate of return on equity of 20%. Management plans to pay 70% of earnings as dividends. Earnings this year will be $3 per share, and investors expect a 12 rate of return on the stock. Calculate the sustainable growth rate.

  Required return on equity investments

What would you pay for a share of ABC Corporation stock today if the next dividend will be $3 per share, your required return on equity investments is 15%, and the stock is expected to be worth $90 one year from now? Hint: PV = FV/(1+r)t

  The state lottery that offers a choice of payment

Penny just won the state lottery that offers a choice of payment. She may opt for either receiving $1,000,000 today or $2,000,000 at the end of ten years. If she can invest her funds at 5% annually, which is better choice?

  What should be the cost of equity of your firm

Suppose you borrow $8000 when financing a coffee shop which is valued at $30000. Assume that the unlevered cost equity of the coffee shop is 15% and that the cost of debt is valued at 5%. What should be the cost of equity of your firm?

  Efficient market hypotheses

Of the following efficient market hypotheses, which one has research generally indicated is not correct? 1. weak 2. Semi Strong 3. strong 4. two of the options

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd