Question: If two portfolios have the same duration the change in
“If two portfolios have the same duration, the change in their value when interest rates change will be the same.” Explain why you agree or disagree with this statement.
Relevant QuestionsFor a corporate bond that has a low credit rating, why might an analytical duration be limited as a measure of interest-rate risk? Can you tell from the following information which of the following three bonds will have the greatest price volatility, assuming that each is trading to offer the same yield to maturity? Bond Coupon Rate (%) Maturity ...Following are U.S. Treasury benchmarks available on December 31, 2007: US/T 3.125 11/30/2009 3.133 US/T 3.375 11/30/2012 3.507 US/T 4.25 11/15/2017 4.096 US/T 4.75 02/15/2037 4.518 On the same day, the following trades ...When all Treasury issues are used to construct the theoretical spot rate curve, what methodology is used to construct the curve? Answer the below questions. (a) “Empirical evidence suggests that with respect to bond risk premiums that influence the shape of the Treasury yield curve, there is a linear relationship between Treasury average returns ...
Post your question