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What would be the approximate profit or loss amount

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Reference no: EM132861348

Question 1: Suppose that a portfolio management company manages an investment fund. The fund manager observes a bond in the market and intends to add it to the fund portfolio. The bond has a 100.000 TL par value, 10% coupon rate (coupon payments are annual) and a 2-years maturity. The business model is to "hold-until-maturity". The company purchases the bond at the beginning of the year when the market yields are 12%. After exactly 1 year of investment, market yields increase to 14%. What would be the approximate profit or loss amount in the income statement for that 1-year period?

a) 1.723 TL loss

b) 10.191 TL profit

c) 9.871 TL profit

d) 1.594 TL loss

e) Other:

Reference no: EM132861348

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