Solution-Which portfolio can be characterized as a bullet

Which portfolio can be characterized as a bullet portfolio

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Reference no: EM133040503

Below are two portfolios with a market value of $500 million. The bonds in both portfolios are trading at par value. The dollar duration of the two portfolios is the same.

Issue	Years to Maturity		Par Value (in millions)
Bonds Included in Portfolio I
A	2.0	$120
B	2.5	$130
C	20.0	$150
D	20.5	$100
Bonds Included in Portfolio II
E	9.7	$200
F	10.0	$230
G	10.2	$ 70

(a) Which portfolio can be characterized as a bullet portfolio? Explain

(b) Which portfolio can be characterized as a barbell portfolio? Explain

Reference no: EM133040503

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Which portfolio can be characterized as a bullet portfolio

Reference no: EM133040503

Reference no: EM133040503

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