alculate the rate of capital gain or loss on a ten-year zero coupon bond which the interest rate has increased from 12% to 15%. The bond has a face value of Tshs. 1,000,000.00 b) A manager of a financial institution is holding 35% of a portfolio in a bond with a five year duration and 65% in a bond with a ten-year duration. What is the duration of the portfolio? c) Briefly explain the factors affecting interest rate risks of a firm
alculate the rate of capital gain or loss on a ten-year zero coupon bond which the interest rate has increased from 12% to 15%. The bond has a face value of Tshs. 1,000,000.00 b) A manager of a financial institution is holding 35% of a portfolio in a bond with a five year duration and 65% in a bond with a ten-year duration. What is the duration of the portfolio? c) Briefly explain the factors affecting interest rate risks of a firm
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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a) Calculate the rate of
b) A manager of a financial institution is holding 35% of a portfolio in a bond with a five
year duration and 65% in a bond with a ten-year duration. What is the duration of the portfolio?
c) Briefly explain the factors affecting interest rate risks of a firm
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