This will leave residual cash

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Reference no: EM131973081

You are hired as an investment manager and given a $8.5 million bond portfolio to manage. You calculate the duration of the liability to be 4.70 years. The client restricts you to two bond issues, both of which come in denominations of $1000.

The Discovery Cafe Bond has a duration of 2.08 years and is quoted at 105.040

The Tardis Intertemporal Bond has a duration of 7.50 years and is quoted at 101.370

To immunize the portfolio you need to put _____% of the portfolio into Discovery Cafe bonds and _________% of the portfolio into Tardis Intertemporal bonds.

To do this you must buy ____ Discovery Cafe bonds and ____ Tardis Intertemporal bonds

This will leave residual cash of $_________.

Reference no: EM131973081

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