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:

Total Revenues

The total amount of money generated by a firm from its sales activities before any expenses are subtracted.

Elastic

A description of a variable's sensitivity to change in another variable, often used in economics to describe how demand or supply responds to changes in price.

Price-elasticity Coefficient

A measure that calculates how much the quantity demanded of a good responds to a change in its price, quantitatively.

Revenues

The total income generated by a company from its business operations, such as sales of goods or services, before any costs or expenses are deducted.