Illustrate the situation graphically

Assignment Help Accounting Basics

Reference no: EM13767072

You manage a portfolio for Ms. Angel Foodcake, who has instructed you to be sure her portfolio has a value of at least $350,000 at the end of six years. The current value of Ms. Foodcake's portfolio is $250,000. You can invest the money at a current interest rate of 8%. You have decided to use a contingent immunisation strategy.

• What amount would need to be invested today to achieve the goal, given the current interest rate?

• Suppose that four years have passed and the interest rate is 9%. What is the trigger point for Angel's portfolio at this time? (That is, how low can the value of the portfolio be before you will be forced to immunise to be assured of achieving the minimum acceptable return?)

• Illustrate the situation graphically.

• If the portfolio's value after 4 years is $291,437 what should you do?

Reference no: EM13767072

Questions Cloud

Explain what is means of work hard and watch your costs : explain what is means of Work hard and watch your costs, Everybody wants to appear reasonable and Create your own set of values to guide your actions.

Discuss contingent immunisation : Discuss contingent immunisation. Is this form of bond portfolio management strategy an active, passive, or combination of both, strategy?

The course home page for specific format requirements : Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited..

What ways can the business benefit from a web site : In what ways can the business benefit from a Web site. What functions should it perform for the company (e.g., marketing, sales, customer support, internal communications, etc.)

Illustrate the situation graphically : Illustrate the situation graphically. If the portfolio's value after 4 years is $291,437 what should you do?

Recall the application about price controls : Recall the application about price controls and the candy bars. During World War II, the U.S. government imposed price controls to set maximum prices on all different products, including candy bars. How did the candy bars producers respond to maximum..

Explain one new concept learned about arrays : Explain one (1) new concept that you have learned about arrays and one (1) new concept that you have learned about loops as a result of reading the assigned article.

Approximate percentage change in the bond price : Use the modified duration to find the approximate percentage change in the bond's price. Find the new price of the bond from this calculation.

Find the percentage in the quantity demanded : if the price elasticity of demand for cigarette is -0.03 then find the percentage in the quantity demanded when the price increases by 10 percent?

User Account

All Pages