Assume you have the following asset and liability in your Balance Sheet:Asset - Bond AModified Duration = 2.6 yearsValue= RM1.5 millionLiability - Bond BModified Duration = 3.1 yearsValue= RM1.0 million duration gap is 0.53 years, net worth reduce by 8000. What should or could you to achieve immunized balance sheet?
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Assume you have the following asset and liability in your Balance Sheet:
Asset - Bond A
Modified Duration = 2.6 years
Value= RM1.5 million
Liability - Bond B
Modified Duration = 3.1 years
Value= RM1.0 million
duration gap is 0.53 years, net worth reduce by 8000.
What should or could you to achieve immunized balance sheet?
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- Assume you have the following asset and liability in your Balance Sheet: Asset - Bond A Modified Duration = 2.6 years Value = RM1.5 million Liability - Bond B Modified Duration = 3.1 years Value = RM1.0 million a. Calculate the duration gap. b. What is the expected change in Net Worth if interest increases by 1%? c. What should or could you to achieve immunised balance sheet? Note: Please show all workings.Assume you have the following asset and liability in your Balance Sheet: Asset - Bond A Modified Duration = 2.6 years Value = RM1.5 million Liability - Bond B Modified Duration = 3.1 years Value = RM1.0 million a. Calculate the duration gap. b. What is the expected change in Net Worth if interest increases by 1%? Assume previous interest is 10% c. What should or could you to achieve immunised balance sheet? Note: Please show all workings.Assume you have the following asset and liability in your Balance Sheet:Asset - Bond AModified Duration = 2.6 yearsValue= RM1.5 millionAAFARLiability - Bond BModified Duration = 3.1 yearsValue= RM1.0 milliona. Calculate the duration gap. b. What is the expected change in Net Worth if interest increases by 1%?attachment. calculation step by step
- We have purchased a security with the following payment schedule: Year 1 2 3 Payment $100 S150 S400 If the present value of this investment is $580.59, what is the rate of return (or interest rate) ?What are liabilities that will be due within a short time (usually one year or less) and that are to be paid out of current assets called? Group of answer choices equity liabilities current liabilities fixed liabilities contra liabilitiesThe possible rates of return of two assets, A and B, under different economic conditions are given below: Economic Situation Probability Return of Asset A Return of Asset B Recession 0.2 10% 6% Stable 0.5 14% 15% Growth 0.3 20% 11% An investor places 50% of his funds in Asset A and 50% in Asset B. [Note: you may use correlation between A and B as 0.2401] Required: (i)Calculate the risk and expected return for each asset. (ii)Calculate the risk and expected return of the investor’s 2-assets portfolio. (iii) What do you understand by total risk?
- An investment is represented by the equation A(t)=10,250(1+ 0.04/12)120 How many years has the account been accumulating interest?For the following exercise, use the compound interest formula, A(t) = P 1 + r n nt , where money is measured in dollars.After a certain number of years, the value of an investment account is represented by the expression 10,950 1 + 0.03 2 24 . How many years had the account been accumulating interest? yrGiven below is the information on various sets of investments. Asset Holding Period Return (HPR) Holding Period (%) Unit Trust- ABP 28 3.5 years RK Share 17 1 year Real Estate 11 9 months MAR Bonds 19 2.8 years MNF Share -2 3 months Calculate the annualised holding period returns for each asset. Based on your calculation of annualised holding period returns in (i) above, which asset would be the best choice for investment? Why?
- What can you calculate with the Excel argument FV? Number of periods of time for a loan or investment. Interest rate. Future value of an investment based on a constant interest rate. The constant periodic payment required to pay off a loan or investment.Investments form a cash flow such that at the end of year 1, the amount of X dollars is deposited, and the end of year 4, the amount is 3X, and at the end of the seventh year, the amount of 5X is deposited. Given that the Macaulay duration is Dmac = 5, determine the modified duration, Dmod- %3D SOLUTION.pls refer to the image attached, 1. suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly, or one that is amortized quarterly? 2. what is your considerations when availing a loan? (quantitative or qualitative considerations) Discuss.