Today is 1 July 2020. Siobhán has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrumen A and instrument B). Siobhán purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 26 units of instrument A and 45 units of instrument B. instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030. Instrument B is a Treasury bond with a coupon rate of = 4,9% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023. Calculate the current duration of Siobhán's portfolio using a yield to maturity of =4.39% p.a. Express your answer in terms of years and round your answer to two decimal places. a. 4.34 Ob.5.73 c. 6.42 d. 4.13

Today is 1 July 2020. Siobhán has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrumen A and instrument B). Siobhán purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 26 units of instrument A and 45 units of instrument B. instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030. Instrument B is a Treasury bond with a coupon rate of = 4,9% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023. Calculate the current duration of Siobhán's portfolio using a yield to maturity of =4.39% p.a. Express your answer in terms of years and round your answer to two decimal places. a. 4.34 Ob.5.73 c. 6.42 d. 4.13

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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An investor holds 100 three-year zero coupon bonds with a face value of £100 which each trade at a price of £92.5. The investor wants to use a one-year zero coupon bond, face value £100, which trades at £95 and a five-year zero-coupon bond with a face value of £200, which trades at £180, to immunize the portfolio. c) If the investors has shorted the one-year and the five year bonds where has she invested the money received? Why has she chosen these forms of assets?
Leah is considering repositioning some of the investments in her bond portfolio. Of the bonds shown below which one has the longest duration and is therefore most sensitive to interest rate changes. Assume that they are all purchased this year and current interest rates are 6.2% Bond A: 6.25% coupon Treasury bond with a current price $1,050 that matures in 2030 Bond B: Zero coupon Treasury bond with a current price $789 that matures in 2030 Bond C: 4.01% AA corporate debenture with a current price $949 that matures in 2030 Bond A Bond B Bond C O They all have the same duration
Today is 1 July, 2019. Siobhán has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Siobhán purchased all instruments on 1 July 2012 to create this portfolio, which is composed of 34 units of instrument A and 28 units of instrument B. • Instrument A is a zero-coupon bond with a face value of $100. This bond matures at par. Its maturity date is 1 January 2029. • Instrument B is a Treasury bond with a coupon rate of J₂=4.18% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current duration of Siobhán's portfolio using a yield to maturity of j₂=4.52% p.a. Express your answer in terms of years and round your answer to two decimal places. O a. 5.23 years b. 7.00 years O c. 5.56 years O d. 6.49 years
You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2023. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2024. On April 15, 2024, the yield to maturity for the bond changed to 5.20%. For your one year anniversary of owning the bond, calculate the bond's total yield for the first year of ownership. Report the percentage to two decimal places (3.126% = 3.13).
Today is 1 July 2021. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2017 to create this portfolio and this portfolio is composed of 385 units of instrument A and 334 units of instrument B. • Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030. • Instrument B is a Treasury bond with a coupon rate of j₂ = 2.99% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2024. (a) Calculate the current price of instrument A per $100 face value (today's value). Round your answer to four decimal places. Assume the yield rate is j₂ =4.07% p.a. a. 60.4325 b. 50.7535 O c. 59.2273 O d. 71.0009
It is 2018 and Ritchie is thinking about buying an Australian Treasury bond with a coupon rate of j2 = 2.05% p.a. and a face value of $100. The maturity date of the bond is 15 May 2033. If Ritchie purchased this bond on 7 May 2018, what was his purchase price (rounded to four decimal places)? Assume a purchase yield of j2 = 2.31% p.a. Question 9Answer a. $96.6707 b. $97.6960 c. $97.6952 d. $97.79
Today is 1 July, 2019. Siobhán has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Siobhán purchased all instruments on 1 July 2013 to create this portfolio, which is composed of 21 units of instrument A and 41 units of instrument B. • Instrument A is a zero-coupon bond with a face value of $100. This bond matures at par. Its maturity date is 1 January 2029. • Instrument B is a Treasury bond with a coupon rate of J2=4.05% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current duration of Siobhán's portfolio using a yield to maturity of j2=4.6% p.a. Express your answer in terms of years and round your answer to two decimal places. a. 5.73 years O b. 4.19 years O c. 4.17 years O d. 6.38 years
Today is 1 July, 2019. Katrina has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Katrina purchased all instruments on 1 July 2011 to create this portfolio, which is composed of 28 units of instrument A and 44 units of instrument B. • Instrument A is a zero-coupon bond with a face value of $100. This bond matures at par. Its maturity date is 1 January 2029. • Instrument B is a Treasury bond with a coupon rate of j2 = 2.16% p.a. and a face value of $100. This bond matures at par. Its maturity date is 1 January 2022. Calculate the current price of instrument A per $100 face value. Round your answer to four decimal places. Assume the yield rate is j2 = 4.03% p.a. O a. $47.2049 O b. $48.7635 O c. $49.7461 O d. $68.4516
On February 9, 2015, Hunter-Gratzner, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $42. We will assume that the 2022 coupon has just been redeemed. Initially (in 2015), the bond was sold at the premium price of $1,037. On February 9, 2022, this bond was selling for $972. The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 1.75% on February 9, 2015, which reflected market expectations about future rates of inflation. The market rate of interest for a riskless corporate bond, of this maturity (i.e., a U.S. Treasury security), was 2.05% on February 9, 2022, which reflects market expectations about future rates of inflation. Question: What was the yield to maturity for this bond on February 9, 2015? [To 2 decimal places.]

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