Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

U.S. Treasury quotes from the WSJ on Oct. 15, 2003: If yields increase by 10 basis points, what is the approximate price change on the

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
U.S. Treasury quotes from the WSJ on Oct. 15, 2003: If yields increase by 10 basis points, what is the approximate price change on the $100,000 Treasury note? Use the duration approximation relationship. Select one: A. $16.05 B. $1,605.05 C. +$179.39 D. +$16.05 E. +$160.51 Calculate the duration of the liabilities to four decimal places. Select one: A. 2.22 years. B. 2.125 years. C. 2.50 years. D. 1.75 years. E. 2.05 years. Third Duration Investments has the following assets and liabilities on its balance sheet. The two-year Treasury notes are zero coupon assets. Interest payments on all other assets and liabilities occur at maturity. Assume 360 days in a year. Using present value bond valuation techniques, calculate the exact price of the bond after the interest rate increase of 20 basis points. Select one: A. $1,007.94. B. $1,003.99. C. $992.06. D. $992.02. E. $996.01. Calculate the duration of the assets to four decimal places. Select one: A. 3.0888 years. B. 2.5000 years. C. 1.7500 years. D. 4.3750 years. E. 2.5375 years. U.S. Treasury quotes from the WSJ on Oct. 15, 2003: If yields increase by 10 basis points, what is the approximate price change on the $100,000 Treasury note? Use the duration approximation relationship. Select one: A. $16.05 B. $1,605.05 C. +$179.39 D. +$16.05 E. +$160.51 Calculate the duration of the liabilities to four decimal places. Select one: A. 2.22 years. B. 2.125 years. C. 2.50 years. D. 1.75 years. E. 2.05 years. Third Duration Investments has the following assets and liabilities on its balance sheet. The two-year Treasury notes are zero coupon assets. Interest payments on all other assets and liabilities occur at maturity. Assume 360 days in a year. Using present value bond valuation techniques, calculate the exact price of the bond after the interest rate increase of 20 basis points. Select one: A. $1,007.94. B. $1,003.99. C. $992.06. D. $992.02. E. $996.01. Calculate the duration of the assets to four decimal places. Select one: A. 3.0888 years. B. 2.5000 years. C. 1.7500 years. D. 4.3750 years. E. 2.5375 years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions