You own a fixed-income asset with a duration of six years. If the level of interest...
You own a fixed-income asset with a duration of six years. If the level of interest rates, which is currently 7.4%, goes down by 10 basis points, how much do you expect the price of the asset to go up (in percentage terms)? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)
Homework Answers
Price of the asset
Change in %:
= -6×-0.10%
= 0.60%
Hence, asset price will increase by 0.60%
*Please rate thumbs up
Add Answer to:
You own a fixed-income asset with a duration of six years. If
the level of interest...
You own a fixed-income asset with a duration of five years. If the level of interest...
You own a fixed-income asset with a duration of five years. If the level of interest rates, which is currently 8%, goes down by 10 basis points (0.1%), how much do you expect the price of the asset to go up (in percentage terms)?
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years....
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years. The average duration of its $250 million in liabilities is 6.6 years. Assets and liabilities are yielding 9 percent. The Fl uses put options on T-bonds to hedge against unexpected interest rate increases. The average delta (ö) of the put options has been estimated at -0.1 and the average duration of the T-bonds is 8.5 years. The current market value of the T-bonds is...
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years....
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years. The average duration of its $250 million in liabilities is 6.6 years. Assets and liabilities are yielding 9 percent. The Fl uses put options on T-bonds to hedge against unexpected interest rate increases. The average delta (d) of the put options has been estimated at -0.1 and the average duration of the T-bonds is 8.5 years. The current market value of the T-bonds is...
A ten-year bond has a yield of 13% and a duration of 7.209 years. If the...
A ten-year bond has a yield of 13% and a duration of 7.209 years. If the bond's yield increases by 50 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's price
A nine-year bond has a yield of 10% and a duration of 7.210 years. If the...
A nine-year bond has a yield of 10% and a duration of 7.210 years. If the bond's yield increases by 25 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's price increased by decreased by
You own a bond that has a duration of 6 years. Interest rates are currently 7%,...
You own a bond that has a duration of 6 years. Interest rates are currently 7%, but you believe the Fed is about to increase interest rates by 22 basis points. Your predicted price change on this bond is ________.
6. An Fl has a $270 million asset portfolio that has an average duration of 7.8...
6.
An Fl has a $270 million asset portfolio that has an average duration of 7.8 years. The average duration of its $230 million in liabilities is 4.6 years. Assets and liabilities are yielding 15 percent. The Fl uses put options on T-bonds to hedge against unexpected interest ate increases. The average delta (5) of the put options has been estimated at -0.3 and the average duration of the T-bonds is 8.3 years. The current market value of the T-bonds...
An eight-year bond has a yield of 10% and a duration of 7.196 years. If the bond's yield increases by 30 basis points,...
An eight-year bond has a yield of 10% and a duration of 7.196 years. If the bond's yield increases by 30 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's price %.
A(n) eight-year bond has a yield of 9% and a duration of 7.211 years. If the...
A(n) eight-year bond has a yield of 9% and a duration of 7.211 years. If the bond's yield increases by 75 basis points, what is the percentage change in the bond's price? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's pric (Click to select) increased by decreased by
Suppose you own a bond issued by X. that has a Modified duration of 16 years....
Suppose you own a bond issued by X. that has a Modified duration of 16 years. Interest rates are currently 1.5% but you believe the Fed is about to decrease interest rates by 50 basis points (1 basis point = 0.0001) in order to stimulate the economy further. Your predicted percentage price change on this X bond is ________ A) -8.00% B) -5.62% C) 5.62% D) 8.00% 8．Market economists all predict a rise in interest rates. An astute bond manager...
You own a fixed-income asset with a duration of five years. If the level of interest rates, which is currently 8%, goes down by 10 basis points (0.1%), how much do you expect the price of the asset to go up (in percentage terms)?
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years. The average duration of its $250 million in liabilities is 6.6 years. Assets and liabilities are yielding 9 percent. The Fl uses put options on T-bonds to hedge against unexpected interest rate increases. The average delta (ö) of the put options has been estimated at -0.1 and the average duration of the T-bonds is 8.5 years. The current market value of the T-bonds is...
An Fl has a $290 million asset portfolio that has an average duration of 8.0 years. The average duration of its $250 million in liabilities is 6.6 years. Assets and liabilities are yielding 9 percent. The Fl uses put options on T-bonds to hedge against unexpected interest rate increases. The average delta (d) of the put options has been estimated at -0.1 and the average duration of the T-bonds is 8.5 years. The current market value of the T-bonds is...
A nine-year bond has a yield of 10% and a duration of 7.210 years. If the bond's yield increases by 25 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's price increased by decreased by
6.
An Fl has a $270 million asset portfolio that has an average duration of 7.8 years. The average duration of its $230 million in liabilities is 4.6 years. Assets and liabilities are yielding 15 percent. The Fl uses put options on T-bonds to hedge against unexpected interest ate increases. The average delta (5) of the put options has been estimated at -0.3 and the average duration of the T-bonds is 8.3 years. The current market value of the T-bonds...
An eight-year bond has a yield of 10% and a duration of 7.196 years. If the bond's yield increases by 30 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's price %.
A(n) eight-year bond has a yield of 9% and a duration of 7.211 years. If the bond's yield increases by 75 basis points, what is the percentage change in the bond's price? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) The bond's pric (Click to select) increased by decreased by
Most questions answered within 3 hours.
-
Create a class called Hotel. The hotel class will track the
current reservations for your one-room...
asked 5 minutes ago -
In space, a 4.0 kg metal ball moving 30 m/s has a head on
collision with...
asked 15 minutes ago -
Financial Markets and Corporate Strategy (assignment template) –
1 of 2
Insights/Instructions: Use this template to...
asked 12 minutes ago -
A firm has announced a cash dividend of $3 dollar per share.
Assuming an efficient market,...
asked 8 minutes ago -
Which of the following statements is consistent with the fact
that capital in an economy is...
asked 23 minutes ago -
Would you hire a white hat hacker or black hat hacker? What are
the pros and...
asked 27 minutes ago -
The CFO is conducting a meeting and she says "we shouldn't
accept this project because we...
asked 29 minutes ago -
How do you obtain the discount rate for an international capital
budgeting problem?
asked 26 minutes ago -
Hi, please read the entire problem.
I need help with the BusOrder class and test for...
asked 28 minutes ago -
Hello, regarding the photoelectric effect I had a couple
questions:
Red light is shining on a...
asked 44 minutes ago -
build a sample navigation Sprite in css ?
asked 42 minutes ago -
Please write a C# program for an concert sale with the
requirements below in Console Form:...
asked 45 minutes ago