Please put the figures in the workings instead of leeters, for example the solutions to this question below: Abacus Ltd is an investment fund that specializes in fixed-income securities. At the end of 2010, the fund’s bond portfolio has the following information Bonds Yield to maturity Price Duration Convexity A 12% 1045 2.35 16.46 B 14% 2265 4.26 22.80 C 8% 1430 3.45 11.96 D 10% 1100 4.20 15.56 Assume that the yield to maturity on each bond increases by 4%, calculate (i) The percentage by which the price of each bond will decrease. (ii) The amount in cedis by which the price of each bond will decrease. (iii) The percentage and the cedi decrease in the total value of the portfolio. Please the answers to this question, I need the full solution.
Please put the figures in the workings instead of leeters, for example the solutions to this question below: Abacus Ltd is an investment fund that specializes in fixed-income securities. At the end of 2010, the fund’s bond portfolio has the following information Bonds Yield to maturity Price Duration Convexity A 12% 1045 2.35 16.46 B 14% 2265 4.26 22.80 C 8% 1430 3.45 11.96 D 10% 1100 4.20 15.56 Assume that the yield to maturity on each bond increases by 4%, calculate (i) The percentage by which the price of each bond will decrease. (ii) The amount in cedis by which the price of each bond will decrease. (iii) The percentage and the cedi decrease in the total value of the portfolio. Please the answers to this question, I need the full solution.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please put the figures in the workings instead of leeters, for example the solutions to this question below:
Abacus Ltd is an investment fund that specializes in fixed-income securities. At the end of 2010, the fund’s bond portfolio has the following information
|
Bonds |
Yield to maturity |
Price |
Duration |
Convexity |
|
A |
12% |
1045 |
2.35 |
16.46 |
|
B |
14% |
2265 |
4.26 |
22.80 |
|
C |
8% |
1430 |
3.45 |
11.96 |
|
D |
10% |
1100 |
4.20 |
15.56 |
Assume that the yield to maturity on each bond increases by 4%, calculate
(i) The percentage by which the price of each bond will decrease.
(ii) The amount in cedis by which the price of each bond will decrease.
(iii) The percentage and the cedi decrease in the total value of the portfolio.
Please the answers to this question, I need the full solution.
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