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Question 5 You are a financial manager and you have bonds worth $ 3 , 0 0 0 , 0 0 0 in your portfolio
Question You are a financial manager and you have bonds worth $ in your portfolio which have a percent coupon rate and will be maturing in years from now. What type of risk exposure do you face on these bonds? Suppose a futures contract on these bonds is available with a standard contract size of US $ per contract. How will you hedge your exposure? If the market interest rates change to percent, what will be your position?
Question
You are a financial manager and
you have bonds worth $
in your portfolio which have a
percent coupon rate and will be
maturing in years from now.
What type of risk exposure do you
face on these bonds? Suppose a
futures contract on these bonds
is available with a standard
contract size of US $ per
contract. How will you hedge your
exposure? If the market interest
rates change to percent, what
will be your position?
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