Consider a corporate bond with 10 years until maturity, trading at par (M=100,000). The modified duration of
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider a corporate bond with 10 years until maturity, trading at par (M=100,000). The modified duration of this bond is 14.2 periods. Also consider a Treasury bond with 7 years until maturity. The modified duration of the Treasury bond is 11.3 periods. Suppose you want to buy the corporate bond and hedge it with a short position in the Treasury bond, what is the market value of your short position?
Expert Answer:
Answer rating: 100% (QA)
Corporate bond has a modified duration of 142 periods Corporate bond is trading ... View the full answer
Posted Date:
Students also viewed these finance questions
-
1, (15 points) Consider a corporate bond with 10 years until maturity, trading at par (M=100,000), with semi-annual yield to maturity 3.5% (the semi-annual coupon rate is also 3.5%). Also consider a...
-
Consider a corporate bond with 10 years until maturity, trading at par (M=100,000), with a semi-annual yield to maturity of 3.5% (the semi-annual coupon rate is also 3.5%). Also consider a Treasury...
-
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
-
The built-up shaft is designed to rotate at 450 rpm. If the radius of the fillet weld connecting the shafts is r = 13.2 mm, and the allowable shear stress for the material is Ï allow = 150 MPa,...
-
The bookkeeper of Lone Star Landscaping prepared the company's balance sheet while the accountant was ill. The balance sheet contains numerous errors. In particular, the bookkeeper knew that the...
-
Identify the errors in the following incomestatement: Keepsakes Company Income Statement For the Year Ended February 29, 2012 Revenue from sales: Sales Add: Sales returns and allowances 7,200,000 . ....
-
Using the information from Review 4-1, answer the following questions. a. Calculate the total cycle time of this manufacturing process. b. Calculate the manufacturing cycle efficiency of this...
-
The left column lists several cost classifications. The right column presents short definitions of those costs. In the blank space beside each of the numbers in the right column, write the letter of...
-
LING101 - University of New England NSW Can you please help me with this question! Topic 10 - Language acquisition Linguists studying child language acquisition have shown that this is a staged pro
-
Let 2 -0.5 A = -4 Find an invertible matrix S and a diagonal matrix D such that S-AS = D. S = D =
-
Read the following article: Social Enterprise for Sustainable Communities: Ontario, Canada. (The 2008 financial crisis) What are the primary problems facing the 2008 financial crisis in Ontario,...
-
Jonas was employing a strategy for solving problems while doing his homework. He thought as he was solving the first problem, "Let's see. The first step is to determine what I already know from the...
-
Worldwide Ventures planned a promotion to extend its reach globally. Money was not an object and the advertising department was told to be as creative as possible. Which of the media types would be...
-
Evaluate the effectiveness of Amazon by using OEC (Organizational Effectiveness Evaluations Checklist) Steps in detail and provide recommendations on the basis of evaluation.
-
What was the CEO Dennis Kozlowski of Tyco International Ltd. white collar crime? Explain briefly.
-
Consider the following information about the various states of economy and the returns of various investment alternatives for each scenario. Answer the questions that follow. State of the Economy...
-
1. Below is depicted a graph G constructed by joining two opposite vertices of C12. Some authors call this a "theta graph" because it resembles the Greek letter 0. a. What is the total degree of this...
-
The following transactions occurred during January, the first month of operations for Red Corporation. Prepare journal entries and create a T-account for inventory that includes the following five...
-
Make T-accounts for the following accounts that appear in the general ledger of Matt Langley, an attorney: Cash; Accounts Receivable; Office Equipment; Legal Database Subscription; Accounts Payable;...
-
During the year, the Fletcher Company experienced the following accounting transactions: 1. Purchased equipment with cash in the amount of \(\$ 130,000\). 2. Purchased supplies on account in the...
Study smarter with the SolutionInn App