final project, Financial Accounting

Assignment Help:
You own a two-bond portfolio. Each has a par value of $1,000. Bond A matures in five years, has a coupon rate of 8 percent, and has an annual yield to maturity of 9.20 percent. Bond B matures in fifteen years, has a coupon rate of 8 percent and has an annual yield to maturity of 9.20 percent. Both bonds pay interest semi-annually. What is the value of your portfolio? what happens to the value of your portfolio if each yield to maturity rises by one percentage point? Rather than own a five-year bond and a fifteen-year bond, suppose you sell both of them and invest in two ten-year bonds. Each has a coupon rate of 8 percent (semi-annual coupons) and has a yield to maturity of 9.20 percent. What is the value of your portfolio? What happens to the value of your portfolio if the yield to maturity on the bonds rises by one percentage point? Based upon your answers to (a) and (b), evaluate the price changes between the two portfolios. Were the price changes the same? Why or why not?

Related Discussions:- final project

Technique of managerial control through budgets, Budgetary Control is a tec...

Budgetary Control is a technique of managerial control through budgets. Elaborate.

Compute the present value, Q. Compute the present value? The offer for...

Q. Compute the present value? The offer for the manufacturing rights is for a ten-year period. Annual after-tax cash flow after Year 4 = $660000 Present value of this c

Features of the torrens title system, Answer both parts of this question. E...

Answer both parts of this question. Each part is worth seven and a half marks each. (a) Describe the features of the Torrens Title system of land registration and compare them t

How many units must the division sell each year, unit selling price of prod...

unit selling price of products= $40 unit variable expense of product= $24 Total fixed expenses= 560,000 avg op assets= 3,000,000 1)how many units must the division sell each yea

ACCOUNTING DECISIONS, DO ACCOUNTANTS EVER REALLY MAKE IMPORTANT DESIONS?

DO ACCOUNTANTS EVER REALLY MAKE IMPORTANT DESIONS?

Trustees duties in administering the d of a, Trustee's duties in administer...

Trustee's duties in administering the D of A 1) To carry out the trusts of the D of A and to distribute the property assigned to him in accordance with the provisions of the D of

Maximize revenues from sales, You are a manager at the DaimlerChrysler. Dai...

You are a manager at the DaimlerChrysler. Daimler-Chrysler has lost money on the Smart car since the first model rolled off the assembly line in 1998. By bringing its little car in

Conditions of a will-executorship laws and accounts, Conditions of a will ...

Conditions of a will A written will is not valid unless it fulfills the following conditions. 1) The testator must sign the will; or he must affix his mark to the will (i.e. a

Write Your Message!

Captcha
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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd