The following bond swaps could have been made in recent years as investors attempted to increase the total return on their portfolio.
From the information presented below, identify possible reason(s) that investors may have made each swap.

1. Use data from finance.yahoo.com to answer the following questions. Enter the stock symbol "S" to locate information for Sprint Corp. Find the company's most recent annual balance sheet in the Financials section.
a. Examine the company's assets and liabilities. What proportion of total assets are current assets? What proportion of total liabilities are current liabilities? Does it seem that there is a good match between the duration of the assets and the duration of the liabilities?
b. Look at the Annual Statement of Cash Flows for Sprint, which is also found in the Financials section. Check the Financing Activities section to see if the company has issued new debt or reduced its debt outstanding. How much interest did the firm pay during the period?
c. Repeat the exercise with several other companies of your choice. Try to pick companies in different industries. Do you notice any patterns that might be due to the industrial environments in which the firms operate?
2. Many bond calculators are offered on the web. For example, you can find one at Investopedia (www.investopedia.com/calculator/mduration.aspx). Given a bond's parameters, you can find duration with the click of a button.
a. Select a bond from The Wall Street Journal online. (Go to www.wsj.com, click on Market Data under the Markets tab, then Rates, and then Corporate Gainers and Decliners under the Rates tab.).
b. Enter the bond's characteristics into the duration calculator.
c. Confirm the bond's duration using Excel's DURATION or MDURATION functions. (In general, you should always pay attention to whether calculators and spreadsheets are providing duration or modified duration.)
d. Based on the bond's current price, by what percent would the price change if the yield were to change by .5%?
e. Repeat the calculations by entering assumed prices of 90, 100, and 110; then answer the following questions:
i. What is the duration of the bond at the each of the prices?
ii. Is the bond price more or less sensitive to interest rates at higher prices or at lower ones?

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YTM (%) Action Call Price a. Sell Baal Electric Pwr. 1st mtg. 6%% due 2020 108.24 95.00 7.71 Buy Baal Electric Pwr. 1st mtg. 2% due 2021 105.20 79.00 7.39 b. Sell Aaa Phone Co. notes 5%% due 2021 Buy U.S. Treasury notes 6%% due 2021 c. Sell Aa1 Apex Bank zero coupon due 2023 101.50 90.00 7.02 NC 97.15 6.78 NC 45.00 7.51 Buy Aal Apex Bank float rate notes due 2036 103.90 90.00 d. Sell A1 Commonwealth Oil & Gas 1st mtg. 6% due 2026 105.75 72.00 8.09 Buy U.S. Treasury bond 5%% due 2032 e. Sell A1Z mart convertible deb. 3% due 2026 7.40 NC 80.60 103.90 62.00 6.92 109.86 10.43 Buy A2 Lucky Ducks deb. 74% due 2032 75.00