What will the percentage change in the price of your bond be if the yield to maturity suddenly…


Instructions:
These problems should aid you arrange for the midterm exam. It should transfer you no past than 2 hours to go through these problems. If you omission to accept extra-credit points, propose these problems in rank on Thursday, April 28th (we get examine your questions during the critique). Answers, but not solutions, get be aidful on Blackboard anteriorly April 28th, for you to be cogent to curb your is-sue. Make safe you demonstration me how you result-outd the problems, and not direct transcribe down the direct answer! We get examine the solutions during our critique rank. Keep a vision of your solutions in occurrence you judge it get aid you during the exam (remember, the exam is disclosed book, disclosed notes). You can result-out these delay your clump or partially. However, if you propose a clump vision, I strongly recommend that you leading do the is-sue partially and barely confront delay your clump to collate answers!!!
NOTE: THE FINAL EXAM WILL ONLY HAVE 16 PROBLEMS (LIKE THE MIDTERM DID). THIS TEST IS LONGER ONLY TO GIVE YOU AN ADDITIONAL CHANCE TO PRACTICE.
  1. You own a 7.5 percent, semiannual coupon compact that ageds in 8 years. The par prize is $1,000 and the floating render to manliness is 7.6 percent. What get the percentage shift in the figure of your compact be if the render to manliness suddenly extensions by 75 plea points?

  1. Blue Water Homes has 8 percent compacts ungathered that aged in 13 years. The compacts pay attention semiannually. These compacts feel a par prize of $1,000 and are seducecogent in 2 years at a recompense of $75. What is the render to seduce if the floating figure is resembling to 103.5 percent of par?

3. A compact has a mitigated space of 6.13 and a render to manliness of 8.9 percent. If attention objurgates extension by 75 plea points, the compact's figure get retrench by _____ percent.
4. A portfolio consists of the forthcoming securities. What is the portfolio pressure of supply X?

5. You feel a portfolio which is included of 70 percent of supply A and 30 percent of supply B. What is the expected objurgate of render on this portfolio?

6. Supply A has a banner sinuosity of 12 percent per year and supply B has a banner sinuosity of 16 percent per year. The interrelation betwixt supply A and supply B is .47. You feel a portfolio of these two supplys wherein supply B has a portfolio pressure of 35 percent. What is your portfolio hostility?
7. A supply investment has a banner sinuosity of 18 percent and a compact investment has a banner sinuosity of 11 percent. The interrelation of the two investments is .24. What is the trench pressure of the supply investment in the restriction hostility portfolio?
8. Of the forthcoming, Supply _____ has the primary flatten of completion miss and Supply _____ has the leading miss recompense.

9. A portfolio consists of two supplys and has a beta of 1.07. The leading supply has a beta of 1.48 and comprises 38 percent of the portfolio. What is the beta of the avoid supply?
10. The forthcoming portfolio has an expected render of _____ percent and a beta of _____.

11. A missy asset has a beta of .88 and an expected render of 7.4 percent. What is the reward-to-miss narration if the miss-free objurgate is 2.8 percent?
12. Wilson Farms' supply has a beta of .79 and an expected render of 7.8 percent. The miss-free objurgate is 2.6 percent and the trade miss recompense is 6 percent. This supply is ____ accordingly the CAPM render for the supply is _____ percent.
A.undervalued; 7.34
B.undervalued; 7.49
C.undervalued; 7.59
D.overvalued; 7.34
E.overvalued; 7.49
13. The trade has a banner sinuosity of 11.7 percent while a missy guard has a banner sinuosity of 23.7 percent. The cohostility of the supply delay the trade is .0149. What is the beta of the supply?
14. The U.S. Treasury beak is rendering 3.1 percent and the trade has an expected render of 11.2 percent. What is the Sharpe narration of a portfolio that has a beta of 1.32 and a hostility of .027556?
15. What is the Treynor narration of a portfolio included of 50 percent portfolio A and 50 percent portfolio B? (The miss-free objurgate is 3.3 percent and the trade miss recompense is 8.5 percent)

16. A portfolio has a beta of 1.52 and an explicit render of 13.7 percent. The miss-free objurgate is 2.7 percent and the trade miss recompense is 7.8 percent. What is the prize of Jensen's alpha?
17. A supply has an annual banner sinuosity of 14.1 percent and an expected annual render of 11.5 percent. What is the smallest expected damage for the instant 6 months given a presumption of 2.5 percent?
18. Southern Fuel has an catalogue of 714,000 gallons of heating oil. The futures contracts on heating oil are domiciled on 42,000 gallons. If the secure wishes to easily hedge its catalogue, it should transfer which one of the forthcoming positions in heating oil futures contracts?
A.crave on 15
B.crave on 17
C.condensed on 15
D.condensed on 16
E.condensed on 17
19. You purchased five September wheat futures contracts at the disclosed today and sold those contracts at the end. What is your completion benefit-service or damage on these contracts?

20.Which one of the forthcoming discretions is out-of-the-money?
A.seduce delay a $20 impress and a supply figure of $21
B.put delay a $35 impress and a supply figure of $33
C.seduce delay a $45 impress and supply figure of $46
D.put delay a $75 impress and a supply figure of $70
E.seduce delay a $50 impress and a supply figure of $49
21. Josh owns 2 seduce discretions on Foster Glass supply. The training figure is $47.50 and the supply figure at stolidity is $49.01. What is the completion payoff on the discretion contracts?
22. A supply is prized at $26 a divide. A European 6-month seduce discretion has a impress figure of $25 and an discretion recompense of $1.40. The trade objurgate is 9.5 percent and the miss-free objurgate is 2.5 percent. What is the figure of a European 6-month put discretion delay

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