The time period of the investment when it obligate. Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

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Answer 1

Question

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

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My pension plan will pay me $10,500 once a year for a 10-year period. The first payment will come in exactly five years. The pension fund wants to immunize its position. Required: a. What is the duration of its obligation to me? The current interest rate is 5.0% per year. b. If the plan uses 5-year and 20-year zero-coupon bonds to construct the immunized position, how much money ought to be placed in each bond? c. What will be the face value of the holdings in each zero? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the duration of its obligation to me? The current interest rate is 5% per year. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Duration years

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Answer 2

Question

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Expert Solution & Answer

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Answer 3

Question

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Expert Solution & Answer

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Answer 5

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Answer 6

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

Answer 7

Chapter 16, Problem 15PS

A

Summary Introduction

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

Answer 8

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

Answer 9

B

Summary Introduction

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

Answer 10

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Answer 11

C

Summary Introduction

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 16 - Prob. 1PS Ch. 16 - Prob. 2PS Ch. 16 - Prob. 3PS Ch. 16 - Prob. 4PS Ch. 16 - Prob. 5PS Ch. 16 - Prob. 6PS Ch. 16 - Prob. 7PS Ch. 16 - Prob. 8PS Ch. 16 - Prob. 9PS Ch. 16 - Prob. 10PS

The time period of the investment when it obligate. Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

Solution Summary: The author calculates the time period of the investment bond if the plan uses 5 years and 20 years zero-coupon.

Videos

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Want to see the full answer?

Chapter 16 Solutions

The time period of the investment when it obligate. Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

Solution Summary: The author calculates the time period of the investment bond if the plan uses 5 years and 20 years zero-coupon.

Videos

To calculate: The time period of the investment when it obligate. Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon. Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

To explain: Face value of the holdings. Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.

Want to see the full answer?

Chapter 16 Solutions

To calculate: The time period of the investment when it obligate.

Introduction: A time period is a weighted average duration in which the total payment is done by the bond and the value of weights is depends on the present value of the payment.

To calculate: The amount which is placed in each bond if the plan uses 5 years and 20 years zero-coupon.

Introduction: The investment bond value for future years depend on the present value of the annuity value. The amount is the product of the present value with weight of the bond.

To explain: Face value of the holdings.

Introduction: Face value is related to the share amount. Face value is first price which is assigned to the share holder and this price is fixed for all the time.