Use the Following Discount Factors When Needed

question 12

Short Answer

Use the following discount factors when needed.
-Calculate the duration of the following portfolio:
i. 3 units of a 0.75-year ?xed rate bond paying 6% quarterly.
ii. 4 units of a 2-year ?xed rate bond paying 3% semiannually.
iii. 7 units of a 1.75-year zero coupon bond.
iv. 1 unit of a 2-year ?oating rate bond with no spread paid semiannually.

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Definitions:

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.

Ending Inventory

The total value of all unsold goods that a company has at the end of an accounting period.

Beginning Inventory

The value of the inventory that a company has at the start of an accounting period, before any purchases or sales have occurred.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.