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You are a fixed income portfolio manager and evaluating a 20 year bond that has a 9% fixed coupon that pays semi-annually. The interest rate
You are a fixed income portfolio manager and evaluating a 20 year bond that has a 9% fixed coupon that pays semi-annually. The interest rate (yield) on this bond is 6% at the time of purchase. You strongly feel that interest rates could move 40 basis points (0.40%) in either direction. Answer parts A and B B: Assume the initial market value of this bond is $80,000,000.00 ($80 Million), and interest rates go down by 80 basis points (0.80%): (1 point each) 1. What is the change in market value? Your answer should be a dollar value. 2. What is the new market value
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