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10. You manage a pension fund. The fund promises to pay out $10 million in 5...
10. You manage a pension fund. The fund promises to pay out $10 million in 5 years. You buy $7472582 worth of par-value bonds that pay 6% annually and mature in 8 years. 5 years from now, when you need to pay your pensioners, the market rate on same-risk bonds is 8.1%. Assume that 5 years from now, the coupon payments that you have reinvested over the life of the fund are worth a total of $2561683. Five years from...
You manage a pension fund that promises to pay out $10 million to its contributors in...
You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of 6% and mature in five years. Right after you make the purchase, the interest rate on same-risk bonds decreases to 4.9%. If the rate does not change again and you reinvest the coupon payments that you receive in same-risk bonds, how much will you fall short of the money...
9. You manage a pension fund that promises to pay out $10 million to its contributors...
9. You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of 6% and mature in five years. Right after you make the purchase, the interest rate on same-risk bonds decreases to 5.1%. If the rate does not change again and you reinvest the coupon payments that you receive in same-risk bonds, how much will you fall short of the...
7a. A bond with a face value of $1000 makes quarterly payments of $20. The bond...
7a. A bond with a face value of $1000 makes quarterly payments of $20. The bond is currently selling for $1048.12 and has 10 years remaining until maturity. What is the bond's official yield-to-maturity? Write your answer out to four decimals - for example, write 6.18% as .0618. 7b. You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of...
Please answer all of these questions. i posted them previously and i didnt get a completed...
Please answer all of these questions. i posted them previously and
i didnt get a completed answer and also got them wrong. can you
please help me i only have one chance to get them right. thank you!
How many years will it take Rexchem, Inc., to accumulate $800,000 for a chemical feeder, if the company deposits $50,000 each year, starting one year from now, into an account that earns interest at 15% per year? (Round up your answer to...
12.Your pension fund is invested in $40 million worth of bonds with a duration of 5.5...
12.Your pension fund is invested in $40 million worth of bonds with a duration of 5.5 years and $60 million worth of bonds with a duration of 8 years. The "target date" (the date that the fund needs to pay its contributors) is 6.909 years from now. To become duration-matched, the fund needs to shift how much of its money from 8-year duration bonds into 5.5-year duration bonds? Round your answer to the nearest dollar. HINT: This is a challenging...
Pension funds pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension...
Pension funds pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension obligation will resemble a perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $3.0 million per year to beneficiaries. The yield to maturity on all bonds is 20%. a. If the duration of 5-year maturity bonds with coupon rates of 16% (paid annually) is 3.7 years and the duration of 20-year maturity bonds with coupon rates...
Pension funds pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension obligation w...
Pension funds pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension obligation will resemble a perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $3.6 million per year to beneficiaries. The yield to maturity on all bonds is 20%. a. If the duration of 5-year maturity bonds with coupon rates of 16% (paid annually) is 3.7 years and the duration of 20-year maturity bonds with coupon rates...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million for money market securities and $2 million for bonds. Having finished your money market purchases, you move on to buying bonds. Telstra is selling 5 year bonds at a face value of $1,000,000 which pay a semi-annual coupon of 6% p.a. You require a yield-to-maturity (YTM) of 7% pa. on Telstra's bonds, what price are you willing to pay for...
Suppose a pension fund must have $10,000,000 five years from now to make required payments to...
Suppose a pension fund must have $10,000,000 five years from now to make required payments to retirees. If the pension wants to guarantee the funds are available regardless of future interest rate changes, it should: A. Sell a 5-year duration bond so that it matures with a book value of $10,000,000 B. Sell $10,000,000 face value discount bonds with a duration of five years C. Purchase 7-year, semi-annual coupon bonds that have a duration of five years D. Purchase 8-year,...
Please answer all of these questions. i posted them previously and
i didnt get a completed answer and also got them wrong. can you
please help me i only have one chance to get them right. thank you!
How many years will it take Rexchem, Inc., to accumulate $800,000 for a chemical feeder, if the company deposits $50,000 each year, starting one year from now, into an account that earns interest at 15% per year? (Round up your answer to...
Pension funds pay lifetime annuities to recipients. If a firm remains in business indefinitely, the pension obligation will resemble a perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $3.0 million per year to beneficiaries. The yield to maturity on all bonds is 20%. a. If the duration of 5-year maturity bonds with coupon rates of 16% (paid annually) is 3.7 years and the duration of 20-year maturity bonds with coupon rates...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million for money market securities and $2 million for bonds. Having finished your money market purchases, you move on to buying bonds. Telstra is selling 5 year bonds at a face value of $1,000,000 which pay a semi-annual coupon of 6% p.a. You require a yield-to-maturity (YTM) of 7% pa. on Telstra's bonds, what price are you willing to pay for...
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