As the bond portfolio manager you are concerned about the impact of changing interest rates on...

 

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As the bond portfolio manager you are concerned about the impact of changing interest rates on your portfolio value. Use the information below and excel functions to determine the value of the current bond portfolio, the portfolio yield and the portfolio duration. Assuming that insterest rate changes will impact all bonds equally, what is the value of the bond portfolio if interest rates increase by 0.25% or 0.5%? From the additional bonds provided, which bond, if added to the bond portfolio will help insulate the portfolio from interest rate risk? Issuer Name Walmart Wells Fargo Ford Motors Johnson & Johnson Caterpillar Coupon Coupons/Year 7.550% 2 4.500% 2 9.950% 6.730% 0.950% 2 2 2 Maturity S&P Yield Date Price Face Value 2/15/30 AA 4.304% 2/15/23 $119.43 $ 100.00 12/15/25 BBB+ 4.383% 2/15/23 $100.09 $ 100.00 2/15/32 BB+ 7.508% 2/15/23 $116.00 11/15/23 AAA 2.384% 2/15/23 $ 103.20 1/10/24 A 5.284% 2/15/23 $96.30 $ 100.00 $ 100.00 $ 100.00 Quantity of Bonds in Portfolio 450 500 680 200 800 Total Value $ 53,743.50 $ 50,045.00 $ 78,880.00 $ 20,640.00 $ 77,040.00 Portfolio Yield Duration Portfolio Duration Find Total Value; Portfolio Yield: Duration: Portfolio Duration What are the formulas? As the bond portfolio manager you are concerned about the impact of changing interest rates on your portfolio value. Use the information below and excel functions to determine the value of the current bond portfolio, the portfolio yield and the portfolio duration. Assuming that insterest rate changes will impact all bonds equally, what is the value of the bond portfolio if interest rates increase by 0.25% or 0.5%? From the additional bonds provided, which bond, if added to the bond portfolio will help insulate the portfolio from interest rate risk? Issuer Name Walmart Wells Fargo Ford Motors Johnson & Johnson Caterpillar Coupon Coupons/Year 7.550% 2 4.500% 2 9.950% 6.730% 0.950% 2 2 2 Maturity S&P Yield Date Price Face Value 2/15/30 AA 4.304% 2/15/23 $119.43 $ 100.00 12/15/25 BBB+ 4.383% 2/15/23 $100.09 $ 100.00 2/15/32 BB+ 7.508% 2/15/23 $116.00 11/15/23 AAA 2.384% 2/15/23 $ 103.20 1/10/24 A 5.284% 2/15/23 $96.30 $ 100.00 $ 100.00 $ 100.00 Quantity of Bonds in Portfolio 450 500 680 200 800 Total Value $ 53,743.50 $ 50,045.00 $ 78,880.00 $ 20,640.00 $ 77,040.00 Portfolio Yield Duration Portfolio Duration Find Total Value; Portfolio Yield: Duration: Portfolio Duration What are the formulas?

Answer rating: 100% (QA)

Here are the formulas and calculations Total Value of Portfolio SUMPriceFace ValueQ... View the full answer