Question: A Portfolio Manager at HSBC bank is structuring a fixed income portfolio to meet the objective of a client. The client has specified the

A Portfolio Manager at HSBC bank is structuring a fixed income portfolio

A Portfolio Manager at HSBC bank is structuring a fixed income portfolio to meet the objective of a client. The client has specified the use of AAA-rated securities. As the Portfolio Manager, you are convincing the client to buy this bond. Based on the data in the table: Issuer Name Company Ticker Coupon (%) Interest Payment Maturity Last Price Yield to Maturity (%) Bond's Description Maybank TF1800089 12 Annually 4 years 98.75 a. RAM Rating 9.0 AAA As the Portfolio Manager, explain the ways to measure the bond's price volatility in managing the fund strategies. (5 Marks) b. Determine the Macaulay duration and Modified for this bond? (10 Marks) C. Calculate the projected price change if the yield to maturity for this bond rises by 80 basis points and calculate the new price after the increment in interest rate, explain your answer. (15 Marks)

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