Question
James bought shares in a investment grade bond fund. Assume that modified duration of the bonds in the portfolio is 14 years. The average maturity
James bought shares in a investment grade bond fund. Assume that modified duration of the bonds in the portfolio is 14 years. The average maturity of the bonds is 23.5 years and the fund has a YTM of 4%. If the NAV of the funds shares is $10, if the fund's yield drop to 3.86%, what is the approximate gain/loss?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. Mcguigan, William J. Kretlow
9th Edition
032416470X, 9780324164701
