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We can measure the portfolio duration by calculating the weighted average of the duration of the bonds in the portfolio. The proportion of the portfolio that a security comprises can be considered as weights. Portfolio duration can be represented as:
w1D1 + w2D2 + w3D3 + .........wKDK
Where,
wi = Market value of bond i/market value of the portfolio.
Di = Duration of bond i.
K = Number of bonds in the portfolio.
Calculating the rupee price change for a given number of basis points for each security in the portfolio and then adding all the price changes can be considered as an alternative procedure for calculating the duration of a portfolio. The portfolio duration can be arrived at by adjusting the percentage price change that is obtained by dividing the total of the price changes by the initial market value of the portfolio.
Bonds can also be classified into convertible and non-convertible depending upon whether they carry a conversion feature or not. Convertible bonds are the ones which ca
Sapp Trucking's balance sheet illustrates a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt presently has a
Question 1: (i) Critically explain and analyse the Lewis model of economic development. (ii) Compare and contrast the neoclassical growth model and the new growth theory.
Aggregates Method Under the aggregates method of constructing an index number, we could have unweighted aggregates index and the weighted aggregates index. Unweighted Aggr
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We need to have done some exploration work on all of the major projects for inclusion in our prospectus, but of our $4m we need at least $1m in the bank to pay for all the listing
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