Question
A client has a 10.8-year investment horizon. Construct a portfolio with the following two bonds for this investor to help protect against interest rate risk.
A client has a 10.8-year investment horizon. Construct a portfolio with the following two bonds for this investor to help protect against interest rate risk. What is the weight to put on bond B in this portfolio?
Macaulay duration
Bond A 6.5
Bond B 15
Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Foster George, Srikand M. Datar, Maureen P. Gowing
5th Canadian Edition
0135004934, 978-0135004937
