How is the internal rate of return of a portfolio calculated?
Answer to relevant QuestionsThe price value of a basis point will be the same regardless if the yield is increased or decreased by 1 basis point. However, the price value of 100 basis points (i.e., the change in price for a 100-basis-point change in ...Answer the below questions. (a) Suppose that the spread duration for a fixed-rate bond is 2.5. What is the approximate change in the bond’s price if the spread changes by 50 basis points? (b) What is the spread duration of ...Some authors give the following formula for the approximate convexity measure: where the variables are defined as in equation (4.24) of this chapter. Compare this formula with the approximate convexity measure given by ...State why you would agree or disagree with the following statement: For a 1-basis point change in yield, the price value of a basis point is equal to the dollar duration. What are the problems with using only on-the-run Treasury issues to construct the theoretical spot rate curve?
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