User Account

All Pages

What is the present value and duration of obligation

Assignment Help Finance Basics
Reference no: EM133121578

You will be paying $10,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%.

a) What is the present value and duration of your obligation?

b) What maturity zero-coupon bond would immunize your obligation?

c) Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 9%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation?

Reference no: EM133121578

Questions Cloud

Bid-offer spread for forward prices : A trader owns a commodity as part of a long-term investment portfolio. The trader can buy the commodity for $951.60 per ounce and sell it for $949 per ounce. Th
Statutorily required to adopt a balanced budget : City department heads have submitted expenditure requests to you that exceed your projected revenue. This is very common so spending decisions must be made. As
Content of character or color of skin : Explain briefly, in your opinion, what is more important the content of character or color of skin?
What is nokia current dividend policy : What is Nokia's current dividend policy? What would you recommend Jorma Ollila to consider when evaluating his company's dividend policy?
What is the present value and duration of obligation : You will be paying $10,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%.
What is the operating profit margin : Holliday PLC has sales of £144m and operating income of £18m. It has financial income of £1.2m. What is the operating profit margin to nearest one decimal place
Percentage of final ownership in black hawk : Vail Venture Investors, LLC., is trying to decide how much percent equity ownership in Black Hawk Products, Inc., it will need in exchange for a $5 million inve
Money laundering from a criminal perspective : Identify the regulations that govern money laundering from a criminal perspective. Can you please include references?
Give the value for the operating profit after tax : Reformulate the income statement for 2020 to distinguish between operating profits and net financing expense. Give the value for the Operating profit after tax

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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