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NEW QUESTION: 1
A portfolio consists of 2 bonds:Bond | Maturity | Coupon | Duration | Proportion in Portfolio
Bond A | 10 years | 8% | 6.7 | 60% Bond B | 7 years | 5.2% |3.9 | 40%
If there is an upward parallel shift in yields by 61 basis points, what will be percentage change in the portfolio value?
A. 3.4%
B. -5.58%
C. -3.4%
Answer: C
Explanation:
Portfolio Duration = wA DA + wB DB = 0.6*6.7 + 0.4 * 3.9 = 5.58.
Percentage change = %* = -5.58 x (0.0061) = -3.4%.Note that we can only use this computation if there is a parallel change in yields for all the bonds.
NEW QUESTION: 2
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NEW QUESTION: 3
Note: This question is part of a series of questions that use the same or similar answer choices. An answer choice may be correct for more than one question in the series. Each question is independent of the other questions in this series. Information and details provided in a question apply only to that question.
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A:
B:
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F:
G:
H:
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Answer: B
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