1,Suppose you want to invest php 450,000 with the SEA FUND. Suppose also that at the time you made the investment, the SADS for this particular equity fund is php 4,3267. 2. Determine the return for the buyer of a 7- year, 3% bond of php 500,000 face value if on the date is issued it is purchased from its original owner for php 450,000.

1,Suppose you want to invest php 450,000 with the SEA FUND. Suppose also that at the time you made the investment, the SADS for this particular equity fund is php 4,3267. 2. Determine the return for the buyer of a 7- year, 3% bond of php 500,000 face value if on the date is issued it is purchased from its original owner for php 450,000.

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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Question

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1,Suppose you want to invest php 450,000
with the SEA FUND. Suppose also that at the
time you made the investment, the SADS for
this particular equity fund is php 4,3267.
2. Determine the return for the buyer of a 7-
year, 3% bond of php 500,000 face value if
on the date is issued it is purchased from its
original owner for php 450,000.

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Could you also include the formula that you use when working out the calculation, for example part A asks the new bond value, could you include a formula to show how this is calculated Consider a bank with the following balance sheet (M means million): Assets Value Duration of the Asset Convexity of the Asset 5yr bond bought at a yield of 3.4% (lending money) $550M 4.562 12.026 12yr bond bought at a yield of 4% (lending money) $800M 9.453 53.565 Liabilities Value Duration of the Liability Convexity of the Liability 2yr bond sold at a yield of 2.4% (borrowing money) $300M 1.941 2.384 4yr bond sold at a yield of 2.8% (borrowing money) $500M 3.759 8.206 Required a) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio; (Hint: equity to asset ratio = total equity/total asset) b) In a)’s scenario, to maintain the equity to asset…
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