Hedge the interest-rate risk on these bonds

Assignment Help Financial Management
Reference no: EM131340681

If the portfolio you manage is holding $25 million of 6s of 2032 Treasury bonds with a price of 110, what forward contract would you enter into to hedge the interest-rate risk on these bonds over the coming year?

Reference no: EM131340681

Questions Cloud

Forecast the firm additional funds needed : Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?
What is the maximum possible length of the fiber link : The fiber loss is 2 dB/km at 0.8 µm. Assume the NRZ format and a rectangular pulse shape.
What hr mechanisms can be introduced in international firm : What HR mechanisms can be introduced in international firm today to build a strategic business partnership, close the gap between management and employees while building a cohesive culture that add value, and reward human capital?
Completion of master of healthcare administration program : You are nearing the end of this course and the completion of the Master of Healthcare Administration program. Take a few minutes to reflect on your journey. What have you learned? What skills and competencies have you developed? How has your perce..
Hedge the interest-rate risk on these bonds : If the portfolio you manage is holding $25 million of 6s of 2032 Treasury bonds with a price of 110, what forward contract would you enter into to hedge the interest-rate risk on these bonds over the coming year?
Describe and analyze the tea party : Describe and analyze the Tea Party and the Occupy Wall Street movements and determine their underlying motives and their likely involvement in the upcoming DRNC event.
Explain the recent change in the price of grapes : Use demand and supply models to illustrate and explain the following: [Use the demand and supply model for a domestic market]: Discuss any demand-side and/or supply-side factors that can explain the recent change in the price of grapes
Organizational risks involved with using an edi system : What are the organizational risks involved with using an EDI system?
Estimate the after tax cash actual dollar cash flows : A project for a new refined petroleum product did not yield estimated sales and is being terminated with no ($0) market value, because the refining equipment will be converted to produce another product. Estimate the after tax cash actual dollar cash..

Reviews

Write a Review

Financial Management Questions & Answers

  What is net present value of acquiring

The Floral Shoppe and Maggie's Flowers are all-equity firms. The Floral Shoppe has 1,600 shares outstanding at a market price of $20 a share. Maggie's Flowers has 2,550 shares outstanding at a price of $28 a share. Maggie's Flowers is acquiring The F..

  Maximum you can afford to borrow to purchase this car

our spouse needs a car and you believe you can afford no more than $350 a month for a 5-year car loan. If the interest rate on this loan is 5% percent, what is the maximum you can afford to borrow to purchase this car? You are borrowing $19,500 to bu..

  The previous one to compensate for inflation

You want to deposit $X in your retirement account today. You plan to retire in 35 years and make your first withdrawal from your account (at time 35) of $100,000; you will make 19 additional annual withdrawals (your last one is at time 54) but each o..

  What formula do you use to find the return

Find the return of an asset with the following information: initial price $32.65 final price $41.22 dividend $2.17? Also what formula do you use to find the return?

  What damages does defendant owe the plaintiff

Sasha is bartending at The Right Round, a nearby pub, because her new song isn’t selling very well. She sees Joe-Lo, a regular customer at The Right Round, is clearly intoxicated. He asks her for one more round of drinks before he leaves. Did defenda..

  Approximate percentage change in price if interest rate rise

Draw the price-ytm (i) graph for a 5% fixed-coupon bond that has 10 years to maturity (assuming annual coupon payments). Calculate the duration for this bond if the interest rate is 3%. What is the approximate percentage change in price if the intere..

  Homeowners with tax free income in the form of a loan

In the last phase of applying for a loan an appraisal of the one occurs to determine the value of the home based on ________features condition? A ______ cap restricts the amount by which the interest rate can increase or decrease during an adjustable..

  What are the equivalent annual costs of the econo-cool

Econo-Cool air conditioners cost $1,400 to purchase, result in electricity bills of $700 per year, and last for 6 years. Luxury Air models cost $1,600, result in electricity bills of $230 per year, and last for 9 years. The discount rate is 21%. What..

  What is the marginal value of road repair

What is the marginal value of road repair for each type of individual? What is the marginal cost to each type of individual?

  Estimates stand-alone intrinsic value

Elf Aquitaine, a French integrated oil company, wishes to expand its scope by acquiring the U. S. oil services firm Bushwhacker (NASDAQ: BUSH). The target is an all- equity firm with 250 million shares outstanding; the most recent closing price was U..

  How much would you have at the end of five years

You currently have 10,000,000 to invest and can earn 15% interest compounded annually. How much would you have at the end of 5 years, 10 years, 15 years, and 20 years?

  What would be his tax bill if he makes the contribution

Assume that Reginald Worthington, who pays 40 percent in income taxes, plans to contribute $100,000 to not-for-profit Ravenswood Community Hospital. Without the contribution, his tax bill would be $500,000. What would be his tax bill if he makes the ..

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