finance

Cole is investing her funds for the next seven years, when she will need the money for one of her goals She is considering two bonds a 10-year bond with a duration of years and an 8-year bond with a duration of 5 years. Which bonds should she use if she wants to attempt toimmunize the portfolio? She should pick the 10-year bond because the duration is closest to her time horizon She should pick the year bond because the maturity is closest to her time horizon She should put half in each bond. She should put 2/3rds in the 10-year bond and 1/3 in the B-year band 20. Bob owns a 10-year bend (Bend Athat is for He finds another bond (Bond) with identical characteristics that is priced at $922 and decides to sell Bond A and buy Bond . What is this type of stratesy called? a Long short strategy Buy sell strategy Substitution swap d. Rate anticipation swap 21. When interest rates increase, which of the following strategies might be helpful to take advantage of the decrease in the value of fixed income securities Taxt swap b. Spread swap c Bullet strategy d. Credit swap Problems 22. Peter has a fixed income portfolio that consists of Bond A Bond Band Bond The bendshave durations of 4.6 and 10. respectively. If Peter has 50% invested in Bond A and 25% invested in each of the other two bonds, what is the duration for the portfolio? Assume that the correlation between the bondisi 05 a. 5.5 23. Gordon bought a 10-year bond with a 6 coupon paid semiannually. He paid $1.078 for the bond. What is the effective duration assuming a 50-basis point change in interest rates! a 73427 b. 75755 c.8.1669 d. 8.2156 24. What is the duration of a 10-year bend, selling for $877.11, with an 26.95 b. 7.04 annual coupon? d 7.62