User Account

All Pages

Market price risk or coupon reinvestment risk

Assignment Help Finance Basics
Reference no: EM132491720

You own a 9 year bond that has a 3% semi-annual coupon, a 6% semi-annual yield to maturity and a modified duration of 7.7. If you plan on holding the bond for 3 years, what is your duration gap? Also, which do you think is the larger risk for this bond as a result of interest rate changes, market price risk or coupon reinvestment risk?

Reference no: EM132491720

Questions Cloud

What send in the kit and the packaging : How will people return the items? Or, do you buy cheap ones and not expect returns? What you send in the kit and the packaging
What is the aar of project : Blink 281 Corporation is considering an investment that will cost $120,000 and last for five years. The investment will be amortized on a straight-line basis
What is champagne cash flow from operations : Champagne, Inc., had revenues of $14 million, cash operating expenses of $9.5 million, and depreciation and amortization of $1.6 million during 2018.
Discuss the challenges the organization had : Discuss the challenges the organization had that limited their profitability and/or competitiveness and how they planned to leverage CMM to overcome
Market price risk or coupon reinvestment risk : Also, which do you think is the larger risk for this bond as a result of interest rate changes, market price risk or coupon reinvestment risk?
ITECH1100 - Understanding the Digital Revolution Assignment : ITECH1100 - Understanding the Digital Revolution Assignment Help and Solution - Federation University, Australia. Task - Video and Disruption Report
What was the factual situation on the ground : What was the factual situation on the ground? What were the main challenges? What role could, and should, the consulting engineer play?
What is the fraction of securities : Your company is considering an expansion project that will cost $1.5 million. The project will generate after-tax cash flows of $175,000 per year for 6 years
Describe what good or service the sell and where operate : Explain what actions the company took to achieve operational excellence. briefly describe what good or service they sell and where they operate.

Reviews

Write a Review

Finance Basics Questions & Answers

  What overall dimensions will minimize the amount of paper

Johnny is redesigning a rectangular poster to contain 16^2 inch of printing with 3 inch margin at the top and bottom 3 inch margin at each side.

  Justify the firm past policy of not using debt

XYZ Pharma Inc. is a pharmaceutical company that traditionally has not used debt to finance its projects. Over the last 10 years, it has also reported high.

  What is your new semiannual interest? payment

What would the par value be at? maturity, assuming a 2.50 percent annual inflation rate and? ten-year maturity? period?

  Identify and calculate possible profit opportunity

Identify and calculate possible profit opportunity using $1millon to make your point.

  Prepare the restaurant cash budget for each month

Collections on credit revenue average 90% in the month following the sales and the remaining 10% in the month following. Cost of sales (purchases) averages 38%

  What is the market-to-book ratio of each of these clothing

Suppose that in 2010, Global launches an aggressive marketing campaign that boosts sales by 15%. However, their operating margin falls from 5.57% to 4.50%. Suppose that they have no other income, interest expenses are unchanged, and taxes are the sam..

  What is the projected net present value of this project

This project has initial costs of $325,000 and annual cash inflows of $87,000, $279,000, and $116,000 over the next three years, respectively. What is the projected net present value of this project?

  What are some of the cultural artifacts

What are some of the cultural artifacts and what do they say about the current culture (values and assumptions) of the high school.

  Failure of lehman brothers on money markets

1. What was the impact of the near failure of Bear Stearns and the failure of Lehman Brothers on Money Markets?

  Compute the earnings per share immediately after stock issue

The Presley Corporation is about to go public. It currently has aftertax earnings of $7,500,000 and 2,500,000 shares are owned by the present stockholders.

  Show the balance sheet of bank

Bank X currently has $ 500 million in transaction deposits on its balance sheet. The Federal Reserve has set the reserve requirement at 10% of transaction.

  Theory look in a corrections justice model

How does rehabilitation theory look in a corrections justice model, medical model, and custodial model

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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