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butalik [34]
3 years ago
7

Your bond portfolio consists of $30 million worth of Treasury STRIPS with 7 years to maturity, and $10 million of Treasury notes

with a Macaulay duration of 3 years. The term structure is flat, and all spot rates are 3%.
What is the modified (not Macaulay) duration of your portfolio?

a) 3 years
b) 4 years
c) Slightly less than 4 years
d) Slightly greater than 4 years
e) None of these
Business
1 answer:
Verdich [7]3 years ago
5 0

Answer:

<em>d) Slightly greater than 4 years</em>

Explanation:

<em>The portfolio's Macaulay period (MaD) is the mean maturity of its retained earnings.</em>

Fifty per cent of cash flows (in terms of PV) come after three years and another fifty per cent arrive after five years, so the MaD is 0.53 + 0.55 = 4.

We must divide the MaD by (1+ytm/2) to get Modified Duration (MoD).

<em>Then portfolio MoD is </em><u><em>4/(1 + 0.02/2) = 3.96.</em></u>

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AfilCa [17]

Filling out a tax form is about as much fun as owing taxes to Uncle Sam. The complexity of the task intensifies as your tax life becomes more complicated.

That's why you should use the simplest tax return form you can, especially if you're still filling out your forms by hand.

But choose carefully. There are three personal income tax forms -- 1040, 1040A and 1040EZ -- with each designed to get the appropriate amount of your money to the IRS. Differences in the forms, however, could cost you if you're not paying attention.

The EZ is the shortest and simplest form, Form 1040A is a bit more complex and the long Form 1040 is the most detailed and potentially difficult. But even if your tax life is simple and straightforward, it might be worthwhile to investigate the other two forms. Why? Generally, the longer the form, the more opportunities for tax breaks.

6 0
3 years ago
Scope creep refers to: a. a task at the lowest level of the WBS. b. the approved project scope statement and its associated WBS.
gogolik [260]

Answer:

The Answer is d. the tendency for project scope to keep getting bigger and bigger.

Explanation:

A scope  refers to all the work involved in creating the products of the project and the processes used to create them.

A scope creep refers to changes, continuous or uncontrolled growth in a project's scope, at any point after the project begins. This can occur when the scope of a project is not properly defined, documented, or controlled.

Hence the answer is d. the tendency for project scope to keep getting bigger and bigger.

6 0
3 years ago
Suppose you win a small lottery and have the choice of two ways to be paid: You can accept the money in a lump sum or in a serie
Salsk061 [2.6K]

Answer:

take the payments over time payout

Explanation:

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8 0
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mario62 [17]

Answer:

76 months

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If you have a credit card it is never a good idea to pay only the minimum monthly payment since you will end up paying a lot of interest and usually other fees and charges apply.

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3 years ago
AllSpice Incorporated plans to do business with a company located in the Leone Republic, a common law country. The companies hav
zheka24 [161]

The contract must be very detailed and should include all the contingencies spelled out in it.

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Since the profit and losses are to be shared between the business partners on the basis of this contract, the contract should have very detailed information in it and all the contingencies should be spelled out in it.

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