A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 5.3%
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Question:
A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 5.3% per year over the next 4 years. The portfolio is currently worth $10 million. One year later interest rates are at 6.3%.
What is the portfolio value trigger point at this time that would require the manager to immunize the portfolio?
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
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