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FINS2624 Online Quiz 3 With Solutions - 2013 14 Questions

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FINS2624 Online Quiz 2 With Solutions - 2013 14 Questions FINS2624 Online Quiz 3 2013 Question 1 Compute the duration of a par value bond with a coupon rate of 8% and a remaining time to maturity of 3 years. Assume coupon interest is paid annually and the bond has a face value $100. Answer 2.783 years.

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FINS2624 Online Quiz 3 With Solutions - 2013 14 Questions
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Finance UNSW fins2624 portfolio management
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Finance UNSW fins2624 portfolio management
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Assume coupon interest is paid annually and the bond has a face value $100. Answer 2.783 years. Question 2 Duration is important in bond portfolio management because I) it can be used in immunization strategies. II) it provides a gauge of the effective average maturity of the portfolio. III) it is related to the interest rate sensitivity of the portfolio. IV) it is a good predictor of interest rate changes. A - I and II B - I and III C - III and IV D - I, II, and III E - I, II, III, and IV Answer D Question 3 When immunizing a portfolio, we are typically balancing off A - Liquidity risk and systematic risk. B - Reinvestment risk and systematic risk. C - Default risk and systematic risk. D - Liquidity risk and reinvestment risk. E - None of the above. Answer D Question 4 Holding other factors constant, the interest-rate risk of a cou...
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