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is urgent. please answer all questions Question Five (B) Abacus Ltd is an investment fund that specializes in fixed income securities. At the end of
is urgent. please answer all questions
Question Five (B) Abacus Ltd is an investment fund that specializes in fixed income securities. At the end of 2010 the fund's bond portfolio has the following information Bond Yield to Maturity Price Duration Convexity A 12% 1045 2.35 16.46 B 14% 2265 4.26 22.80 8% 1430 3.45 11.96 D 10% 1100 4.20 15.56 Assume that the yield to maturity on each bond increases by 4%, calculate The percentage by which the price of each bond will decrease (2 marks) The amount in cedis by which the price of each bond will decrease (2 marks) (iii) The percentage and the cedi decrease in the total value of the portfolio. (1 mark) Question Five (B) Abacus Ltd is an investment fund that specializes in fixed income securities. At the end of 2010 the fund's bond portfolio has the following information Bond Yield to Maturity Price Duration Convexity A 12% 1045 2.35 16.46 B 14% 2265 4.26 22.80 8% 1430 3.45 11.96 D 10% 1100 4.20 15.56 Assume that the yield to maturity on each bond increases by 4%, calculate The percentage by which the price of each bond will decrease (2 marks) The amount in cedis by which the price of each bond will decrease (2 marks) (iii) The percentage and the cedi decrease in the total value of the portfolio. (1 mark)Step by Step Solution
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