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
Related questions
Question
Please provide explanation for D1
![4. Answer the following questions:
[M12]: Answer the current yield on a three-year bond whose face value is $1,000 with a
coupon rate of 6% per year and a price of $900? Your answer should be in
percentages and rounded to two decimal places, and don't put the symbol of %.
Eg. If your answer is 34.45678%, fill in 34.47.
[M13]: Answer the (theoretical) bond price whose maturity is three years with interest rate of
10% per year and face value is $1,000 with a coupon rate of 6% per year. Your
answer should be rounded to natural number, and don't put the symbol of $.
Eg. If your answer is $34.567, fill in 35.
[D1]: Explain the effects of diversification in portfolios in several lines.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1077e2db-e230-4539-af72-4ff36b7e393b%2F42cd2dff-508a-4687-80f0-adace1eacb88%2Fqgfr6mi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Answer the following questions:
[M12]: Answer the current yield on a three-year bond whose face value is $1,000 with a
coupon rate of 6% per year and a price of $900? Your answer should be in
percentages and rounded to two decimal places, and don't put the symbol of %.
Eg. If your answer is 34.45678%, fill in 34.47.
[M13]: Answer the (theoretical) bond price whose maturity is three years with interest rate of
10% per year and face value is $1,000 with a coupon rate of 6% per year. Your
answer should be rounded to natural number, and don't put the symbol of $.
Eg. If your answer is $34.567, fill in 35.
[D1]: Explain the effects of diversification in portfolios in several lines.
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