12. You are managing a portfolio of $1 million. Your target duration is 10 years, and you...

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12. You are managing a portfolio of $1 million. Your target duration is 10 years, and you can choose from two bonds: a zero-coupon bond with maturity of 5 years, and a perpetuity, each currently yielding 5%.

a. How much of each bond will you hold in your portfolio?

b. How will these fractions change next year if target duration is now 9 years?

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Investments

ISBN: 9780077261450

8th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jul 24, 2024 11:02 AM

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12. You are managing a portfolio of $1 million. Your target duration is 10 years, and you...

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Investments

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