You own a bond portfolio worth $64,000. You estimate that your portfolio has an average YTM of 5.3% and a Modified Duration of 18 years. If your portfolio's average YTM were to decrease by 3 basis points, how much would the value of your portfolio change? Round to the nearest cent. [Hint: Answer is positive if the portfolio value increases and negative if the value decreases]
You own a bond portfolio worth $64,000. You estimate that your portfolio has an average YTM of 5.3% and a Modified Duration of 18 years. If your portfolio's average YTM were to decrease by 3 basis points, how much would the value of your portfolio change? Round to the nearest cent. [Hint: Answer is positive if the portfolio value increases and negative if the value decreases]
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
#10
![Question 10
Homework • Unanswered
You own a bond portfolio worth $64,000. You estimate that your portfolio has an average YTM of 5.3% and a Modified Duration of
18 years. If your portfolio's average YTM were to decrease by 3 basis points, how much would the value of your portfolio change?
Round to the nearest cent. [Hint: Answer is positive if the portfolio value increases and negative if the value decreases]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffcb4b124-0bae-4a71-ac36-265cc0494b9b%2Fe74ef807-24a2-49fd-9e95-9ef809970bc5%2Fn3b47tp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 10
Homework • Unanswered
You own a bond portfolio worth $64,000. You estimate that your portfolio has an average YTM of 5.3% and a Modified Duration of
18 years. If your portfolio's average YTM were to decrease by 3 basis points, how much would the value of your portfolio change?
Round to the nearest cent. [Hint: Answer is positive if the portfolio value increases and negative if the value decreases]
Expert Solution
Step 1
A financial instrument that does not affect the ownership of the common shareholders or management of the company and issue with a fixed cost is term as the bonds.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education