Exhibit 19.10 Use the Information Below for the Following Problem(S)

question 72

Multiple Choice

Exhibit 19.10
Use the Information Below for the Following Problem(S)
You are creating a portfolio that consists of the following two bonds. Bond A pays an annual 7% coupon, matures in two years, has a yield to maturity of 8%, and a face value of $1,000. Bond B pays an annual 8% coupon, matures in three years, has a yield to maturity of 9%, and a face value of $1,000.
-Refer to Exhibit 19.10.Assume that your investment horizon is 2 years and your portfolio consists only of bonds A and B.What proportion should be invested in each bond to immunize the portfolio?

• A) Invest 72.4% in bond A and 27.6% in bond B.
• B) Invest 68.3% in bond A and 31.7% in bond B.
• C) Invest 58.5% in bond A and 41.5% in bond B.
• D) Invest 31.7% in bond A and 68.3% in bond B.
• E) Invest 27.6% in bond A and 72.4% in bond B.

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Definitions:

Boot Options

In the BIOS configuration settings, boot options prioritize devices in the order in which the computer looks for boot files. Also known as boot drive order, boot sequence, or boot menu.

Operating System

An operating system (OS) is system software that manages computer hardware, software resources, and provides common services for computer programs.

USB Host Controller

A hardware device that enables a computer to interface with USB connections, managing and facilitating communication between the computer and attached USB devices.

Device Manager

A Windows utility that allows users to view and control the hardware attached to the computer.