26. (15 pts) You are a financial advisor who specializes in fixed income assets. Your client...
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26. (15 pts) You are a financial advisor who specializes in fixed income assets. Your client has a large investment in one single bond securities, and is worried about interest rate risk, given the high inflation of 6%. The bond has a $ 1,000 par value, 6% annual coupon bond that mature in 5 years. Assume that market interest rate is 8%. Can you suggest your client an investment horizon that could protect the value of his/her bond asset from interest rate changes? Round to 2 decimal places. 26. (15 pts) You are a financial advisor who specializes in fixed income assets. Your client has a large investment in one single bond securities, and is worried about interest rate risk, given the high inflation of 6%. The bond has a $ 1,000 par value, 6% annual coupon bond that mature in 5 years. Assume that market interest rate is 8%. Can you suggest your client an investment horizon that could protect the value of his/her bond asset from interest rate changes? Round to 2 decimal places.
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