Suppose the bond portfolio is twice as large, $20 million, but that its modified duration is only
Question:
Suppose the bond portfolio is twice as large, $20 million, but that its modified duration is only 4.5 years. Show that the proper hedge position in T-bond futures is the same as the value just calculated, 100 contracts.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 0% (2 reviews)
The price value of a basis point is still 9000 as a onebasisp...View the full answer
Answered By
Nicholas Maina
Throughout my tutoring journey, I've amassed a wealth of hands-on experience and honed a diverse set of skills that enable me to guide students towards mastering complex subjects. My proficiency as a tutor rests on several key pillars:
1. Subject Mastery:
With a comprehensive understanding of a wide range of subjects spanning mathematics, science, humanities, and more, I can adeptly explain intricate concepts and break them down into digestible chunks. My proficiency extends to offering real-world applications, ensuring students grasp the practical relevance of their studies.
2. Individualized Guidance:
Recognizing that every student learns differently, I tailor my approach to accommodate various learning styles and paces. Through personalized interactions, I identify a student's strengths and areas for improvement, allowing me to craft targeted lessons that foster a deeper understanding of the material.
3. Problem-Solving Facilitation:
I excel in guiding students through problem-solving processes and encouraging critical thinking and analytical skills. By walking learners through step-by-step solutions and addressing their questions in a coherent manner, I empower them to approach challenges with confidence.
4. Effective Communication:
My tutoring proficiency is founded on clear and concise communication. I have the ability to convey complex ideas in an accessible manner, fostering a strong student-tutor rapport that encourages open dialogue and fruitful discussions.
5. Adaptability and Patience:
Tutoring is a dynamic process, and I have cultivated adaptability and patience to cater to evolving learning needs. I remain patient through difficulties, adjusting my teaching methods as necessary to ensure that students overcome obstacles and achieve their goals.
6. Interactive Learning:
Interactive learning lies at the heart of my approach. By engaging students in discussions, brainstorming sessions, and interactive exercises, I foster a stimulating learning environment that encourages active participation and long-term retention.
7. Continuous Improvement:
My dedication to being an effective tutor is a journey of continuous improvement. I regularly seek feedback and stay updated on educational methodologies, integrating new insights to refine my tutoring techniques and provide an even more enriching learning experience.
In essence, my hands-on experience as a tutor equips me with the tools to facilitate comprehensive understanding, critical thinking, and academic success. I am committed to helping students realize their full potential and fostering a passion for lifelong learning.
4.90+
5+ Reviews
16+ Question Solved
Related Book For
Essentials Of Investments
ISBN: 9780073368719
7th Edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
Question Posted:
Students also viewed these Business questions
-
United Millers purchases corn to make cornflakes. When the price of corn increases, the cost of making cereal increases, resulting in lower profits. Historically, profits per quarter have been...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
Do firms follow the same steps for impairment testing of finite- and indefinite- life intangible assets ? Explain.
-
Define experimental condition, experimental treatment, and experimental group. How are these related to the implementation of a valid manipulation?
-
1. Exporting cigarettes [to Asia] is good business for America; there is no reason we should be prohibited from doing so. Asians have been smoking for decades; we are only offering variety in their...
-
What are the functions of a condenser ?
-
Peter owns 50% of Air South Corporation, an air charter service. His S corporation stock basis at beginning of the year is $100,000. Air South has not done well this year and will report an ordinary...
-
1. Determine the stability condition for the given structure assuming that the links are rigid. (sina sino -2lcosa -2lcose- k www ||
-
A pension fund holds a portfolio of money market securities that the manager believes are paying excellent yields compared to other comparable-risk short-term securities. However, the manager...
-
Return to the arbitrage strategy just laid out. What would be the three steps of the strategy if F 0 were too low, say, $617? Work out the cash flows of the strategy now and at time T in a table like...
-
Use the information in Figure 4.2 to predict the positions of the equilibria in the reactions in problem 4.4.
-
Suppose A, B, and C all make their first carrier sense, as part of an attempt to transmit, while a fourth station D is transmitting. Draw a timeline showing one possible sequence of transmissions,...
-
In the source routing example, the address received by B is not reversible and does not help B know how to reach A. Propose a modification to the delivery mechanism that does allow for reversibility....
-
For the network given in Figure 3.51, show how the link-state algorithm builds the routing table for node D. Figure 3.51) D A 8 3 B 2 2 1 E 6 F LL
-
Suppose that when a TCP segment is sent more than once, we take SampleRTT to be the time between the most recent transmission and the ACK, as in Figure 5.10(b). Assume, for definiteness, that TimeOut...
-
What kind of problems can arise when two hosts on the same Ethernet share the same hardware address? Describe what happens and why that behavior is a problem.
-
Union Company is examining its operating cash management. One of the options the firm is considering is a zero-balance account (ZBA). The firms bank is offering a ZBA with monthly charges of $1,500,...
-
Compile data on consumption and expenditures for the following categories in 30 different countries: (1) food and beverages, (2) clothing and footwear, (3) housing and home operations, (4) household...
-
A newly issued bond has the following characteristics: a. Calculate modified duration using the information above. b. Explain why modified duration is a better measure than maturity when calculating...
-
Noah Kramer, a fixed-income portfolio manager based in the country of Sevista, is considering the purchase of a Sevista government bond. Kramer decides to evaluate two strategies for implementing his...
-
As part of your analysis of debt issued by Monticello Corporation, you are asked to evaluate two of its bond issues, shown in the following table. a. Using the duration and yield information in the...
-
Describe what the PPF Curve represents and explain the relationship between the vertical axis representing one good or service and the horizontal axis representing another good or service.
-
Find the reserve ratio and change in money supply if the change in reserves is 500 and money multiplier is 4. The Federal Reserve has instituted a reserve ratio of 12%, what is the money multiplier?...
-
3) If the price level in the US is 110, the price level in Britain is 115, and the nominal exchange rate is 1.5 pounds (Britain's currency) per dollar, what is the real exchange rate from the US...
Study smarter with the SolutionInn App