Question: Q1. Explain the following diagram Q4. Construct an efficient portfolio from the following table with on two assets Bond Value Time Path of 10% Coupon

Q1. Explain the following diagram

Bond Value Time Path of 10% Coupon Bond's Value When r. Falls

Q4. Construct an efficient portfolio from the following table with on two assets

to 5% and Remains There (Premium Bond) 1,495 Time Path of Bond

Bond Value Time Path of 10% Coupon Bond's Value When r. Falls to 5% and Remains There (Premium Bond) 1,495 Time Path of Bond Value When r, = Coupon Rate = 10% (Par Bond) M = 1,000 M 714 Time Path of 10% Coupon Bond's Value When , Rises to 15% and Remains There (Discount Bond) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years

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