What assumption do we make when we duration hedge? Is this a reasonable assumption to make?
Question:
What assumption do we make when we duration hedge? Is this a reasonable assumption to make?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 53% (13 reviews)
In general the higher the duration the more a bonds price will drop as in...View the full answer
Answered By
Sandra Dimaala
Sandra from Philippines ,LICENSED PROFESSIONAL TEACHER.
Teachers are our nation builders—the strength of every profession in our country grows out of the knowledge and skills that teachers help to instill in our children. And, as a nation, we must do much, much more to fully appreciate and support their work.
0.00
0 Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
The following equation is sometimes used to forecast financial requirements: AFN = (A0*/S0) (S) (L0*/S0) (S) MS1 (1 POR) What key assumption do we make when using this equation? Under what...
-
What is the pH of a solution that is 2.5 ( 10-9 in NaOH? Does your answer make sense? What assumption do we normally make that is not valid in this case?
-
The dataset FloridaLakes is introduced in Data 2.4 on page 68, and we return to the dataset in Exercise B.45 on page 315. To see if there is evidence of a negative correlation between pH in lakes and...
-
A car is initially travelling at 3 0 m / s , which is above the speed limit . The driver sees a speed limit trap ahead and applies the brakes for 5 seconds, causing the car to slow down by 2 m / s...
-
On the figures, label the following points and sketch the derivative. a. One point where the derivative is positive. b. One point where the derivative is negative. c. The point with maximum...
-
Detail the meaning of the Rank Ordering Ethical Principle. The degree of agreement on ordering of ethical principles is unknown. There is the possibility for variability in individual hierarchies and...
-
For each of the following situations, calculate the degrees of freedom \((d f)\), identify the critical values (assume \(\mathrm{a}=.05\) [two-tailed]), calculate the \(t\)-statistic \((t)\), make a...
-
An importer of childrens toys, Fun N Games, Inc., receives a price quotation from a German toy maker offering toy train sets: KBG train sets. Locomotive. Four cars. Transformers. Thirty pieces of...
-
What role does strategic foresight play in shaping strategic planning processes, particularly in anticipating and adapting to disruptive technological advancements, regulatory shifts, and...
-
1. What are pros and cons of Apples tight control of licensing? 2. What role has ecosystem played in Apples competitive advantage?
-
Zero-coupon bonds are available with a principal of $1 and the following maturities: (a) 1 year (market price $0.93), (b) 2 years (market price $0.82), (c) 3 years (market price $0.74). Calculate the...
-
Solve the equation with final data V(T) = 1. This is the value of a coupon bond when there is a known interest rate, r(t). What must we do if interest rates are not known in advance? dV +K(t) =...
-
A recent study found that racially mixed juries deliberated longer, raised more facts, and conducted broader and more wide ranging deliberations than either all white or all black juries. Why do you...
-
PERT Probabilistic Analysis You are assigned as the new project manager for Sensor Design Project. You are in the processes of developing and analyzing the projects schedule. Based on the WBS and...
-
4 You are a tech start-up entrepreneur. With a passion to build the next unicorn from India, you are expected to develop and present a detailed assignment as a part of the comprehensive Business...
-
A leading multinational corporation in the gaming industry planned to expand its operations to southern Europe, namely to Spain. Two project managers were assigned to achieve this goal: one project...
-
A rectangular beam is subjected to uniformly distributed dead load (WDL), live load (WLL), and a point dead load (PDL) as shown below. Determine the dimensions and reinforcement of the beam. The data...
-
A wooden beam is fabricated from boards as shown, which are fastened together with screws and glue, as shown in the figure below. The screws are uniformly spaced along the span of the beam at...
-
The steering wheel of a car has a radius of 0.19 m, and the steering wheel of a truck has a radius of 0.25 m. The same force is applied in the same direction to each steering wheel. What is the ratio...
-
Suppose that a flow network G = (V, E) violates the assumption that the network contains a path s t for all vertices V. Let u be a vertex for which there is no path s u t. Show that there must...
-
Would a firm want to subscribe to a shared cost data service if the same data were going to be available to competitors? Discuss your reasoning.
-
Explain how you might use different types of research (focus groups, observation, survey, and experiment) to forecast market reaction to a new kind of disposable baby diaper, which is to receive no...
-
Marketing research involves expensesometimes considerable expense. Why does the text recommend the use of marketing research even though a highly experienced marketing executive is available?
-
In North Carolina, transaction records must be retained for several years. Unset starred question At the conclusion of the transaction, or after all transaction funds held by the broker have been...
-
How has organizational culture been a factor in the success of a business?
-
Your rent is $800 a month, health insurance is $200, food is $1000, clothing budget is $150 (for everyone), electric is $70, gas is $110, cell phone is $100, car insurance is $114 and you spend...
Study smarter with the SolutionInn App