Consider a corporate bond with 10 years until maturity, trading at par (M=100,000). The modified duration of this bond is 14.2 periods. Also consider a Treasury bond with 7 years until maturity. The modified duration of the Treasury bond is 11.3 periods. Suppose you want to buy the corporate bond and hedge it with a short position in the Treasury bond, what is the market value of your short position? A. 143,183 B. 113,638 C. 100,000 D. 125,664

Which of the following is not a personality trait? sincerity word processing punctuality laziness

Jennifer purchased a house in a brand new development in the outskirts of town. when her house was built, the nearest fire department was nearly 20 miles away. as her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. what effect will the new fire station have on her homeowners insurance premium? a. a new fire department will be more demanding on local taxes. her annual premium will go up. b. the location of a fire department has no bearing on the value of her house. her annual premium will stay the same. c. the new fire department will reduce the risk of financial loss in her home. her annual premium should decrease. d. with a fire department so close (less than 5 miles), financial risk on jennifer’s home practically disappears. she will not need to pay insurance anymore.

Bond j has a coupon rate of 6 percent and bond k has a coupon rate of 12 percent. both bonds have 14 years to maturity, make semiannual payments, and have a ytm of 9 percent. a. if interest rates suddenly rise by 2 percent, what is the percentage price change of these bonds?