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Can an expert pls give me an ansere thank you You are the portfolio manager of a large company that invests in many securities, including

Can an expert pls give me an ansere thank you

You are the portfolio manager of a large company that invests in many securities, including corporate bonds. You have been assigned the task of bond portfolio management. You are provided with the following data about bonds:

The maturity period is four years

Coupon rate 10%

Par value $1,000

Coupons on bonds are paid annually

Yield to maturity of bonds 11%

i) Using the above data, fill in the blanks in the following tableimage text in transcribed

See the lecture notes for formulae ii)

Based on the calculations in part i, calculate the modified duration and convexity of the bond

iii) Using the modified duration, calculate the change in bond price in dollars when yield to maturity changes by two per cent

iv) Using the convexity, calculate the change in bond price in dollars when yield to maturity changes by two per cent

image text in transcribed

y= yield to maturity Wt= weight for year t 3+2+1=6marks Part c A company must make a payment of $24,759 in 8 years. The market interest rate is 12%. The company's portfolio manager wishes to fund the obligation using four-year zero-coupon bonds and perpetuities paying annual coupons. How can the manager immunise the obligation? Suppose two years have passed, and the interest rate remains at 12%. Is the position still fully funded? Is it still immunised? If not, what actions are required

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