Rates remain unchanged throughout your planning horizon

Assignment Help Financial Management

Reference no: EM131931268

You have a planning horizon of H = 6 years and with to immunize your investment for that horizon. You attempt to do so by buying a perpetual bond that pays $100 annually and has a YTM of 20% p.a. You will reinvest the coupons throughout this 6-year period and, additionally, you will sell the bond at the end of that 6-year period. Find the total cash flow you will have 6 years from now if interest rates remain unchanged throughout your planning horizon. Give the answer with two decimals; e.g., 1,234.56. As always, do not include the dollar sign in your answer.

Reference no: EM131931268

Questions Cloud

What must the current price of the stock be : A call option on a stock has exercise price $100 and premium of $5 (per share). what must the current price of the stock be? Explain.

How many facilities and types of facilities are in dataset : Load the dataset into a dataframe. How many facilities and types of facilities are in this dataset? List unique facility types and names

Choose and implement the appropriate leadership response : Cognitive resource theory views nondirective leader behavior as most helpful for performance when the leader is competent, relaxed, and supported.

Develop a market profile : BSNS 7360 INTERNATIONAL BUSINESS ASSIGNMENT-PROFILE AND POTENTIAL OF A CHOSEN OVERSEAS MARKET. Develop a market profile

Rates remain unchanged throughout your planning horizon : Find the total cash flow you will have 6 years from now if interest rates remain unchanged throughout your planning horizon.

This manager is engaged in which management function : The "Big Five" personality dimension of agreeableness refers to which of the following sets of personality traits?

Find one appropriate stock to replace these two : Assuming that you could find one appropriate stock to replace these two, what should be its beta?

Implement a message server in a distributed environment : Implement a message server in a distributed environment (i.e. between processes running on machines that are physically separate) by using BSD sockets.

Find the weight corresponding : Find the weight corresponding to t = 1, w1, in the definition of duration as a weighted average of the times at which the cash flows occur: D = 1*w1 + 2*w2.

User Account

All Pages