7. It can be shown that the solution to the above immunization problem is to invest in:...
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Question:
7. It can be shown that the solution to the above immunization problem is to invest in: 22,650.14 Bonds of Type B and 30,528.78 Bonds of Type D. What is the standardized convexity of this portfolio? why?
A. 141.446
B. 198.331
C. 61.266
D. 50.296
E. None of the above
8. It can be shown that the solution to the above immunization problem is to invest in: 22,650.14 Bonds of Type B and 30,528.78 Bonds of Type D. Based on the concept of duration and convexity, what is the percentage change in this portfolio if interest rates increase by 1% at all maturities?Why?
A. Decrease by 9.355%
B. Decrease by 10.062%
C. Decrease by 12.339%
D. Decrease by 13.331%
E. None of the Above
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