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May 5-yedr- ol as just inherited a large sum of money. Havi knowledge on investment, she's well aware o concept of duration and decides to apply it to pond portfolio. In particular, Jasmine intends P1 million of her inheritance to purchase Trea=

May 5-yedr- ol as just inherited a large sum of money. Havi knowledge on investment, she's well aware o concept of duration and decides to apply it to pond portfolio. In particular, Jasmine intends P1 million of her inheritance to purchase Trea=

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jasmine May is a 45-year-old academic dean who has just inherited a large sum of money. Having knowledge on investment, she's well aware of the concept of duration and decides to apply it to her bond portfolio. In particular, Jasmine intends to use P1 million of her inheritance to purchase Treasury bonds, she is considering four bonds: a. An 8. 5%, 13-year bond that's priced at P1, 045 to yield 7. 47% b. A 7.875%, 15-year bond that's priced at P1, 020 to yield 7. 60% c. A 20-year stripped Treasury that's priced at P202 to yield 8. 22% d. A 24-year, 7.5% bond that's priced at P955 to yield 7. 90% 3. Find the duration of the portfolio if Jasmine puts P360, 000 each into bonds a and c and P140, O00 each into bonds b and d.
Transcribed Image Text:Jasmine May is a 45-year-old academic dean who has just inherited a large sum of money. Having knowledge on investment, she's well aware of the concept of duration and decides to apply it to her bond portfolio. In particular, Jasmine intends to use P1 million of her inheritance to purchase Treasury bonds, she is considering four bonds: a. An 8. 5%, 13-year bond that's priced at P1, 045 to yield 7. 47% b. A 7.875%, 15-year bond that's priced at P1, 020 to yield 7. 60% c. A 20-year stripped Treasury that's priced at P202 to yield 8. 22% d. A 24-year, 7.5% bond that's priced at P955 to yield 7. 90% 3. Find the duration of the portfolio if Jasmine puts P360, 000 each into bonds a and c and P140, O00 each into bonds b and d.
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