Question
Bond Coupon Time to Maturity (Years) Modified Duration (Years) Current Yield to Maturity Forecasted Yield to Maturity Expected Change US Treasury 6% 3 3 2%
| Bond | Coupon | Time to Maturity (Years) | Modified Duration (Years) | Current Yield to Maturity | Forecasted Yield to Maturity | Expected Change |
| US Treasury | 6% | 3 | 3 | 2% | 1% | 1% |
| IBM | 6% | 5 | 4 | 3% | 2% | 1% |
| Ford | 5% | 10 | 7 | 6% | 4% | 2% |
| GE | 8% | 20 | 11 | 9% | 6% | 3% |
| Tesla | 0% | 30 | 25 | 10% | 9% | 1% |
If your goal is to maximize the value of your portfolio, pick the bond that you would you buy in anticipation of the expected changes in yield to maturity.
Explain or show your rationale.
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 10th Edition
1337902578, 978-1337902571
