Question
Q27. Consider an asset with a current market value of $1 250 000 and a duration of 4.2 years. Assume the asset is partially funded
Q27. Consider an asset with a current market value of $1 250 000 and a duration of 4.2 years. Assume the asset is partially funded through zero-coupon bonds which currently sells for $1 225 000 and has a maturity of 5 years. The current discount rate is 15%. Calculate the duration gap for this scenario:
A.-0.3 years
B.0.3 years
C.-0.7 years
D.0.7 years
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
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