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Consider the following T-bonds, prices are taken on 10/21/2022 : a. Why are the bonds selling at premium? b. Why are the coupon rates of
Consider the following T-bonds, prices are taken on 10/21/2022 : a. Why are the bonds selling at premium? b. Why are the coupon rates of the two bonds maturing in 8/15/2041 so different? c. A pension fund manager has $10m invested in bond 1,$25m invested in bond 2 , and $15m in bond 3. What is the weighted average Duration of the portfolio? What will be the total change in value of his portfolio if interest rates increase by 75BP ? Consider the following T-bonds, prices are taken on 10/21/2022 : a. Why are the bonds selling at premium? b. Why are the coupon rates of the two bonds maturing in 8/15/2041 so different? c. A pension fund manager has $10m invested in bond 1,$25m invested in bond 2 , and $15m in bond 3. What is the weighted average Duration of the portfolio? What will be the total change in value of his portfolio if interest rates increase by 75BP
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