Question: After performing a simulation, you find that the present value of liabilities is as shown in the following table: Interest rate assumption Present value of

After performing a simulation, you find that the present value of liabilities is as shown in the following table:

Interest rate assumption

Present value of liabilities

6%

$410 million

7%

$365 million

8%

$265 million

What is the effective duration of the liabilities? How can this help a fund manager to structure their assets?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

After performing a simulation, you find that the present value of liabilities is as shown in the following table: Interest rate assumption Present value of liabilities 6% $410 million 7% $365 million...

Q:

You have decided to put $ 5 0 0 in the bank. The bank has given you 2 options: ( A ) 2 0 percent interest compounded annually for 5 years; or ( B ) 8 percent compounded quarterly for only 2 years....

Q:

Assets Liabilities 2019 2018 2019 2018 Cash & Equivalent S460,000 $400,000 Aceruals 50,000 $100,000 Account receivables 510,000 500,000 Account Payable 450,000 350,000 Inventories 550,000 600,000...

Q:

LONG-LIVED ASSETS Refer to the notes to the financial statements.The first note, "Summary of Significant Accounting Policies," should provide information about the company's depreciation and...

Q:

LONG-LIVED ASSETS Refer to the notes to the financial statements.The first note, "Summary of Significant Accounting Policies," should provide information about the company's depreciation and...

Q:

I need help on a written assignment for my Government and Not-for-Profit Accounting Course. I've attached a word document with the assignment details and grading rubrix along with a pdf of a...

Q:

Lyons Document Storage Corporation: Bond Accounting : In December 2008, Rene Cook sat in her cubicle trying to remember what she had learned in business school about bonds and bond accounting. Ms....

Q:

CASE: THE SOUND'S ALIVE COMPANY Marissa Jones is the president and CEO of Sound's Alive, a company that manufactures and sells a line of speakers, CD players, receivers, high-definition televisions,...

Q:

Case 9-2 Continental A.G. Write a report of approximately 750 words that addresses the following points: Examine Continental?s financial statements for unusual accounting practices that may have a...

Q:

This have to be completed in the attached spreadsheet . 3-1 Homework: Stock Valuation Calculations This homework submission should include all calculations, completed on the designated tab of the...

Q:

Characterize the temperature range over which epoxies might be used, typical values of shear strength, and commonly observed curing times.

Q:

1) Here it is again, our favorite signal: the sinusoid. V(our friend) volts 4V-T 3V- 2V- 1V- ev- -1V- -2V- -3V- -4V- 0 Frequency: Hz 0.001 Amplitude: volts Period: 0.002 seconds seconds

Q:

Which of the following is not a financial asset?Multiple ChoiceBookAskPrintferencescommon stockbank loanspreferred stock Buildings

Q:

Highlight the key points and give answer without grammatical mistakes 4 5 0 . IRP

Q:

1 What are some of the pros and cons of online learning programmes? Duke Corporate Education (Duke CE) is a not- for- profit company that delivers custom corporate education to clients across the...

Q:

5 How does IiP encourage a strategic approach to people development?

Q:

2 W hat additions or alterations might be considered to this method? Phillips (2005), in response to the regular calls for a way of measuring the contribution of training, has developed an approach...