What amount would need to be invested today to achieve goal

Assignment Help Financial Management

Reference no: EM131892218

You manage a portfolio for Ms. B, 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. Greenspan's portfolio is $250,000. You can invest the money at a current interest rate of 8%. You have decided to use a contingent immunization strategy.

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

ii) 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 immunize to be assured of achieving the minimum acceptable return?

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

Reference no: EM131892218

Questions Cloud

Compute the cumulative incidence of stroke in the study : Compute the cumulative incidence of stroke in the study and Compute the cumulative incidence of stroke in patients classified as hypertensive at baseline

What should be annual coupon of convertible bond : What should be the annual coupon of the convertible bond assuming you want the bond to trade at par? The coupon will be paid semi-annually.

What is the borrower total cash outlay every 6 months : What is the borrower's total cash outlay every 6 months?

Prepare a list of three best practices to follow : Prepare a list of three best practices to follow in the field of managerial economics and globalization. Provide a rationale for your response.

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

Portion paying interest : How much of the principal is paid down by the payment made at the end of the 22nd month?

Hat actions if any should you take : You are the CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufacture component parts for your US assembly. What actions, if any, should you take?

Problem stock values : The Herjavec Co. just paid a dividend of $1.70 per share on its stock. What will the stock price be in three years?

Capital spending for avery-vinton during 20y5 : Avery-Vinton also reported deprecation expense of $44,000 on its income statement for the year ending 20Y5. What was the capital spending for Avery

User Account

All Pages