The due diligence process

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Reference no: EM131918161

1. The due diligence process

a. Uncovers all of the potential risks of an investment

b. Underwrites a project’s future cash flows with a high degree of certainty

c. is necessary only within an investment posses a high degree of risk

d. is an imperfect process to determine whether the potential returns from an investment are sufficient given the potential risk

2. Macaulay and modified durations

A. A 5-year bond paying annual coupons of 4.432% and selling at par.

B. An 8-year bond paying semiannual coupons with a coupon rate of 8% and a yield of 7%.

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Reference no: EM131918161

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