Question: What security will he most likely be able to sell at the day? 2. At what price will the bank buy that security

Juan Miguel Lopez is currently holding FXTN 20-17 and RTB 10-2 with

What security will he most likely be able to sell at the day?

2. At what price will the bank buy that security from him?

3. At what price will he be able to sell it to the bank?

4. At what yield is Juan in effect selling that security to the bank?

5. Assuming that he intends to sell only PHP 2,000,000 face at market value of that particular security, how much gross capital is he expected to get from the proceeds?

6. Assuming that the accrued days amounted to 30 days, how much net accrued interest will he receive?

7. Assuming that today is a Monday and that there are no holidays within the week, when will he get the proceeds?

8. At what price did he previously buy the RTB 10-2?

9. At what price did he previously buy the FXTN 20-17?

10. Between the two securities, which is more sensitive to interest rate movements?

Juan Miguel Lopez is currently holding FXTN 20-17 and RTB 10-2 with a face value of PHP 7,000,000 and PHP 3,000,000 respectively. He is in need of immediate liquidity as he needs to finance certain medical bills of his parents. Looking at the daily fixed income indicative prices that his private banker is sending him regularly.... Peso Government Securities SERIES 10-42 05-71 05-72 07-51 07-56 RTB10-02 10-55 10-54 20-17 RTB20-01 RTB25-01 ISSUE DATE DUE DATE COUPON YRS TO GO 3.19 4.37 4.91 5.13 6.41 7.69 8.42 8.57 18.07 18.69 24.35 04-Sep-06 04-Sep-16 08-Nov-12 08-Nov-17 23-May-13 23-May-18 18-Aug-11 11-Aug-18 22-Nov-12 22-Nov-19 03-Mar-11 03-Mar-21 24-Nov-11 24-Nov-21 19-Jul-11 19-Jan-22 19-Jul-11 19-Jul-31 01-Mar-12 01-Mar-32 24-Oct-12 24-Oct-37 9.125% 4.125% 2.125% 5.000% 3.875% 7.375% 5.750% 6.375% 8.000% 5.875% 6.125% Indic Bid 123.88 100.95 Indic Offer 119.23 104.80 99.42 109.22 105.23 127.95 115.94 117.55 129.19 111.23 112.72 Indic Bid Yield Indic Offer Yield 2.8000% 2.9500% 2.2500% 3.0500% 2.9750% 3.2500% 3.5500% 3.9500% 5.4500% 5.8500% 6.0500% 4.9500% 5.2000%

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