You are in charge of the risk management division at XYZ, Inc. XYZ’ assets consist of investments worth $30 million today in 3-year zero-coupon bonds. XYZ’s liabilities consist of a single payment of $43 million due in 10 years. The term structure of interest rates is flat at 5%. Assume that all shifts in the term structure are parallel. a. What is the Macaulay and Modified duration of XYZ’ assets? b. XYZ, Inc. thinks that interest rates may rise to 5.5%. Compute the exact change in the value of XYZ’s assets and compare this with the approximate change using duration.
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Business, 22.06.2019 10:00
In a small group, members have taken on the task roles of information giver, critic/analyzer, and recorder, and the maintenance roles of gatekeeper and follower. they need to fulfill one more role. which of the following would be most effective for their group dynamics? a dominator b coordinator c opinion seeker d harmonizer
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Business, 22.06.2019 12:20
Selected transactions of the carolina company are listed below. classify each transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity. 1. common stock is sold for cash above par value. 2. bonds payable are issued for cash at a discount
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Business, 22.06.2019 20:20
As you have noticed, the demand for flip phones has drastically reduced, and there are only a few consumer electronics companies selling them at extremely low prices. also, the current buyers of flip phones are mainly categorized under laggards. which of the following stages of the industry life cycle is the flip phone industry in currently? a. growth stage b. maturity stage c. decline stage d. commercialization stage
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Business, 23.06.2019 13:10
Lindor inc.'s $100 par value preferred stock pays a dividend fixed at 8% of par. to earn 12% on an investment in this stock, you need to purchase the shares at a per share price of
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You are in charge of the risk management division at XYZ, Inc. XYZ’ assets consist of investments wo...
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