now the following about your client’s fixed income portfolio. The portfolio is worth $1,600,000. Currently, the portfolio has $700,000 invested in 3-year 5.5% coupon bonds, each with a face value of $1000, with annual coupons, and $900,000 invested in a long-term bond fund which has a duration of 12.4 years. The yield curve is currently flat at 4.5% per year. What is the duration of your client’s portfolio? Group of answer choices 8.22 years 7.14 years 7.75 years 10.91 years
now the following about your client’s fixed income portfolio. The portfolio is worth $1,600,000. Currently, the portfolio has $700,000 invested in 3-year 5.5% coupon bonds, each with a face value of $1000, with annual coupons, and $900,000 invested in a long-term bond fund which has a duration of 12.4 years. The yield curve is currently flat at 4.5% per year. What is the duration of your client’s portfolio? Group of answer choices 8.22 years 7.14 years 7.75 years 10.91 years
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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You know the following about your client’s fixed income portfolio. The portfolio is worth $1,600,000. Currently, the portfolio has $700,000 invested in 3-year 5.5% coupon bonds, each with a face value of $1000, with annual coupons, and $900,000 invested in a long-term bond fund which has a duration of 12.4 years. The yield curve is currently flat at 4.5% per year. What is the duration of your client’s portfolio?
Group of answer choices
8.22 years
7.14 years
7.75 years
10.91 years
6.03 years
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