Question
In: Finance
This is your first week at a mutual fund as an analyst. Your boss asked you...
This is your first week at a mutual fund as an analyst. Your
boss asked you to evaluate the
price risk of two 30-year bonds – Bond A and Bond B.
Bond A has a coupon rate of 4%, while Bond B has a coupon rate of
8%. Both bonds pay
their coupons semi-annually
.
A) Construct an Excel spreadsheet showing the prices of each of
these bonds for yields to
maturity ranging from 1% to 15% at intervals of 1%. Column A should
show the yield
to maturity (ranging from 1% to 15%), and columns B and C should
compute the prices
of the two bonds (using Excel’s PV function) at each interest
rate.
B) In columns D and E, compute the percentage difference between
the bond price and its
value when the yield to maturity is 6% (initial yield to maturity)
for bonds A and B,
respectively [ = {(Price (at current YTM) – Price (at initial YTM
of 6%)}/ Price (at
initial YTM of 6%)].
| Face value | $1,000.00 |
| Coupon rate bond A | 4.00% |
| Coupon rate bond B | 8.00% |
| Time | 30.00 Years |
| Initial Yield to Maturity | 6.00% |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You are an analyst at Microsoft, and your boss has asked you to complete a ratio...
You are an analyst at Microsoft, and your boss has asked you to
complete a ratio analysis for the firm’s competitors. Use the
following information to write a complete ratio analysis for
Microsoft’s competitors. Firm’s are identified by tickers below.
Ratio MSFT IBM SAP AAPL Profit Margin ROE ROA Debt to Equity
Current Ratio 28.31% 39.35% 9.44% 92.79% 3.12 10.97% 50.34% 6.64%
270.60% 1.29 16.53% 15.03% 8.36% 40.44% 1.59 22.72% 46.05% 10.89%
97.32% 1.30
As a stock analyst, your boss, Jerry, has asked you to compile some information on stock...
As a stock analyst, your boss, Jerry, has asked you to compile
some information on stock of Southern Infrastructure Corporation
including a 95% confidence interval for the mean daily return that
he needs to include in a report to senior management. He says that
he is also not sure exactly what a 95% confidence interval means
and would like you to add an explanation.
You have been following the share price of Southern
Infrastructure Corporation and have recorded the daily...
You are asked to give financial advice to a mutual fund manager. The fund has had...
You are asked to give financial advice to a mutual fund manager.
The fund has had a history of investing in an equally -weighted
portfolio of 50 stocks and is considering cutting down the number
of stocks to 10 or 20. You assume that all stocks the fund is
considering investing in have the same standard deviation of 40%
and that the correlation between each pair of stocks is identical
and equal to 0.25.
a. To start your analysis, you...
Imagine that you work for the U.S. Department of Justice as an economic analyst. Your boss...
Imagine that you work for the U.S. Department of Justice as an
economic analyst. Your boss emails you and asks you to analyze the
following scenarios for a market made up of two firms that compete
by simultaneously setting quantities. Firm 1’s quantity is denoted
by q1 and the cost of production in its factory is summarized by a
cost function C(q1) = 20q1. Firm 2’s quantity is denoted by q2 and
the cost of production in its factory is...
Imagine that you work for the U.S. Department of Justice as an economic analyst. Your boss...
Imagine that you work for the U.S. Department of Justice as an
economic analyst. Your boss emails you and asks you to analyze the
following scenarios for a market made up of two firms that compete
by simultaneously setting quantities. Firm 1’s quantity is denoted
by q1 and the cost of production in its factory is summarized by a
cost function C(q1) = 20q1. Firm 2’s quantity is denoted by q2 and
the cost of production in its factory is...
Suppose you are a mutual fund manager. Your fund owns a riskyportfolio with an expected...
Suppose you are a mutual fund manager. Your fund owns a risky
portfolio with an expected rate of return of 20% and a standard
deviation of 30%. The T-bill rate is 5%. Assume a client decides to
invest in your risky portfolio a proportion (y) of his total
investment budge and invest in a proportion (1-y) of risk-free
T-bills.(i) If his overall portfolio will have an expected return 15%,
then how much is the proportion y? (ii) How much is...
Assume that you are a manager and your boss asked to meet with you later today...
Assume that you are a manager and your boss asked to meet with you
later today to discuss putting a team together. Since you were not
provided with any other information, you need to be prepared with a
written document. Identify the different options for groups and
teams, indicate when each type is appropriate, and include some of
the characteristics of groups and teams. Also describe the stages
of formation. Also, include some of the characteristics of groups
and teams.
You have been hired as financial analyst by ABC Corporation – a globally diversified mutual fund....
You have been hired as financial analyst by ABC Corporation – a
globally diversified mutual fund. Your employer is considering
buying MC Electronics – a Korean company. Your boss has asked you
to estimate beta for MC Electronics. You have decided to use the
following model to estimate beta. RNokia = α + β(RM) + ε Discuss
how will choose RM?
Justin Owens is an analyst for an equity mutual fund that invests in British stocks. At...
Justin Owens is an analyst for an equity mutual fund that
invests in British stocks. At the beginning of 2008, Owens is
examining domestic stocks for possible inclusion in the fund. One
of the stocks that he is analyzing is British Sky Broadcasting
Group (London Stock Exchange: BSY). The stock has paid dividends
per share of £9, £12.20, and £15.50 at the end of 2005, 2006, and
2007, respectively. The consensus forecast by analysts is that the
stock will pay...
You are the financial analyst at SewMart, an arts and crafts retail store. Your boss has...
You are the financial analyst at SewMart, an arts and crafts
retail store. Your boss has asked you to review the company's
financial results for the past three years and to provide an
analysis of your findings:
SewMart Ratios
20x9
20x8
20x7
Sales trend
16.7
22.1
25.1
Current ratio
0.78
1.90
2.20
Acid-test ratio
0.40
1.32
1.90
Accounts receivable turnover
41.29
33.20
10.60
Inventory turnover
3.58
6.25
7.80
1. Has your company performed worse, better, or about the
same?
2....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- explain the difference between quantitative and qualitative research strategies. Provide an example of a crime based...
- use postorder and inorder tree traversals to make preorder traversal. #!/usr/bin/env python3 # encoding: UTF-8 """Turning...
- 1. Write an if-else statement to describe an object. Print "Balloon" if isBalloon is true and...
- An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon...
- Write a program that copies the contents of one file to a destination file. This program...
- how to conduct a marketing mix for 3d crest white strips
- Is big data analytics used for service innovation at Amazon? If so, please write a brief...
ADVERTISEMENT