Problem Solving Activity•A bank has a $1 million position in a five year, zero coupon bond. The bond is trading at a yield to maturity of 7%. The historical mean change in daily yields is 0%, and the standard deviation is 12 bp

Answers

Answer 1

Answer:

The complete question is: "A Bank has a S1 million position in a five-year, zero-coupon bond with a face value of $1,402,552. The bond is trading at a yield to maturity of 7.00 percent. The historical mean change in daily yields is 0.0 percent and the standard deviation is 12 basis points

a. What is the modified duration of the bond?

b. What is the maximum adverse daily yield move given that we desire no more than a 5 percent chance that yield changes will be greater than this maximum?

c. What is the daily earnings at risk for this bond? "

a. Modified duration = D/(1+r)

Modified duration = 5 / (1+7%)

Modified duration = 5/1.07

Modified duration = 4.6729 years

b. Maximum adverse daily yield  = 1.65\б = 1.65 * Standard deviation = 1.65 * 0.0012 = 0.00198

d. Price volatility = Modified duration * Potential adverse move in yield  = 4.6729 * 0.00198 = 0.009252 =  0.9252%

Daily earnings at the risk of this bond = Value of position * Price volatility) = $1,000,000*0.009252 = $9,252


Related Questions

Which factors can affect a stock’s price? Check all that apply. market performance the company’s financial health the quantity products produced location of the company the economy

Answers

Answer:

market performance the company’s financial health  the economy

Explanation:

Stocks prices fluctuate as long as the market is open. The price of a stock may rise and fall depending on its demand and other factors.  The financial performance of a company creates demand for its shares. A company that had good returns will be in high demand, which makes its stock prices rise. A company with poor financial performance will see its share price decline.

The overall performance of the economy and the exchange markets also affects prices. When the economy and the market are performing well, prices tend to rise. The opposite is also true.

Answer:

Market performance

The company's financial health

The economy

Explanation: This is the correct answer for Edge 2020. ^-^

Which job in the Finance career is ideal for a person just out of high school and seeking on-the-job training?
Bank Teller
Actuary
Personal Finance Advisor
Business Finance Advisor

Answers

Answer:

Bank teller

Explanation:

I took the test. Also, you only need a high school diploma for bank teller, and you need a bachelors degree for all of the others!

The job in the Finance career is ideal for a person just out of high school and seeking on-the-job training is bank teller. The correct option is (A).

What do you mean by the Bank teller?

An employee of a bank whose duties include handling customer cash and negotiable instruments is known as a bank teller. This employee may also go by the titles of cashier or customer service agent.

They are more likely to identify and halt fraudulent transactions because they are front-line employees, preventing losses for a bank (counterfeit currency and cheques, identity theft, confidence tricks, etc.).

Tellers must also be outgoing and engage with the public in order to inform them about their accounts and other banking services.

Therefore, the  job in the Finance career is ideal for a person just out of high school and seeking on-the-job training is bank teller.

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If a product is no longer showing strong market share and sales are diminishing, which of the following would be the best approach to trying to extend its lifetime on the market
A. Offer extended warranties
B. Re-launch
C. Positioning
D. Discontinue

Answers

Answer:B. re-launch

Explanation: just took the quiz

Answer:

Re launch

Explanation:

A p e x

PLEASE HELP ME ILL MAKE YOU BRAINLIEST

Answers

Answer:

I for one think that B is the answer.

So The Link Is Block So I Can Get Any Info But If You Could Find Out For Me Thx
how much does a bottle of THC oil cost?

Answers

Answer:

An RSO type indica or sativa whole plant cannabis extract, will run between $25–$40 per gram or ml, if it’s sold in a syringe.

Preston wants to be an accountant. When he decides on a college education, which would be the best choice for this career?

Answers

Answer:

state college with an earned bachelor’s degree

Explanation:

In the fashion retail industry, Jennifer Hyman and Jennifer Fleiss were the first to use technology in such an innovative way. What is the best way to describe this entrepreneurial opportunity?

Answers

Answer:

Providing an existing product to an existing market in a new way

Explanation:

Jennifer Hyman and Jennifer Fleiss realised that there were some serious issues in the fashion industry. The younger group and women populace had the desire/demand to buy designers clothes but could not afford the same.

Moreover, the designers themselves wanted to reach this demographic audience. As these customers may face cash issues now but given the opportunity they were long life customers.

Therefore, Jennifer Hyman and Jennifer Fleiss came up with the idea to use technology in way that the could provide the existing products to the existing market in a cost effective way, thereby, enabling them to buy these designer made clothes.

What is the best source of information to use when purchasing a new car?

Answers

Find out what your current vehicle is worth before you negotiate the purchase of a new car. Check the National Automobile Dealers Association's (NADA) Guides, Edmunds, and Kelley Blue Book. This information may help you get a better price from the dealer.

You purchased $100 each of three different stocks in January. Stock A increased 30% in value. Stock B increased 15% in value. Stock C lost 20% of its original value. What was the overall net percentage of gain in the three stocks? (Round to the nearest percent.)

Answers

Answer:

8%

Explanation:

130+115+80= 325

put 325/300, then subtract 1, then multiply by 100

this gives you 8.3 repeating, so you just round down to 8 percent.

Answer:

8%

Explanation:

I am doing the test right now and got it correcet

Which of the following is a characteristic of a certificate of deposit?

Answers

Answer:

C). It requires that the funds be kept in the account for a minimum fixed period of time e.g. 90 days

Multiple- choices

A).  You have to earn at least $100,000 in salary to be allowed to buy a CD

B).  It is just a different name for a savings account

C). It requires that the funds be kept in the account for a minimum fixed period of time e.g. 90 days

D). Only large banks offer them

Explanation:

Banks and other financial institution offer certificates of deposit (CD) saving account to customers who intend to limit the number of withdraws. This type of savings account pays a higher interest rate than the regular savings account. A customer wishing to open this account agrees with the bank on the duration that they want to save the money.  Withdrawals can only be made after the agreed period lapses. Should the customer demand for their money before the end of the agreed period,  they may get penalized by the banks.

Think about why might two or more people decide to form partnership instead of each forming a sole proprietorship ?

Answers

Answer:

This is because in partnership,good ideologies are brought and shared,the fund for setting up the business is adequate, it's promotes productivity as well.

I lost my bestfriend. Omg I can't take it.​

Answers

Answer:

why tho

Explanation:

why th

Answer:

i'm so sorry this happend to me at the beginning of last year and i was sad for the whole year but im fine now cause she was toxic and wouldn't let me have any friends and i got a glow up

Explanation:

plz help
Read the following scenario:


An up-and-coming rock band is interested in producing their first album. The band has researched the process of creating a digital album and invested in some recording equipment. However, they still need to cover some production and distribution costs. Which of the following would best help this band meet their production and distribution goals?


holding a benefit concert to raise funds for production

applying for a small-business loan from a bank

creating a crowdfunding site on the internet

selling pre-orders of their album to fans

Answers

Answer:

creating a crowdfunding site on the internet

Explanation:

took test

Answer:

C: creating a crowdfunding site on the internet

Explanation:

edg2021

(100 on unit test)

In Towneville, the average persons earns $15,000, and the CPI is 125. In Gutenberg, the average person earns $25,00 and the CPI is 225. Where would you choose to live, and why?

Answers

Answer:

I would choose to live in Townville. This is because the real wage of $12,000 in Townville is greater than the real wage of $11,111 in Gutenberg.

Explanation:

Note: The correct amount which average persons earns in Gutenberg is $25,000, not $25,00 that is mistakenly written in the question.

The explanation to the answer is now provided as follows:

Where to live and why can be determined by comparing the real wages in Towneville and Gutenberg.

Real wage refers to the nominal wage that has been adjusted for inflation. The real wage can be calculated using the following formula:

Real wage = (Nominal wage / CPI) * 100 ……………. (1)

Where;

For Towneville:

Nominal wage = $15,000

CPI = Consumer price index, an inflation measure = 125

Substituting the values into equation (1), we have:

Real wage in Townville = ($15,000 / 125) * 100 = $120 * 100 = $12,000

For Gutenberg:

Nominal wage = $25,000

CPI = Consumer price index, an inflation measure = 225

Substituting the values into equation (1), we have:

Real wage in Gutenberg = ($25,000 / 225) * 100 = $111.11 * 100 = $11,111

Based on the calculations above, I would choose to live in Townville. This is because the real wage of $12,000 in Townville is greater than the real wage of $11,111 in Gutenberg.

As a business owner, why would understanding the basic accounting equation be important?

Answers

Answer:

I don't know correctly but still I'll try

I wrote on my own pl look into my efforts and give me points

Explanation:

understanding is the thing that we want, not want that we need while doing any kind of work , like it my be your homework, it may be your preparation for some exam understanding is the basic thing that we need in any case weather it is doing in any problem or any love matter we have to understand each and every case of our life, our love or relationship matter, or understanding any problem .

especially when comes to business it is really important also because equations ok .. For doing any equation we have to understand what formula we can use , should we add or subtract etc . so ya if we understand only we can do something in life or in any equation.....

Emma!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Answers

Emma?!

Emma?!


Emma?!

Emma?!

Answer:

HI EMMA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

LOVE YOUR PIC!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Stay safe and have a great day!!!! :D !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

What do you mean by levels of professions?​

Answers

Answer:

The word “profession” means different things to different people. But at its core, it’s meant to be an indicator of trust and expertise.

Traditionally, a “professional” was someone who derived their income from their expertise or specific talents, as opposed to a hobbyist or amateur. This still carries through to fields today, such as sport.

But given today’s fast-changing environment of knowledge and expertise, it’s now generally understood that simply deriving an income from a particular task might make you an “expert” or “good at your job” – but if you’re a “professional”, this has a broader meaning.

There’s a long history of attempts to clarify this meaning, and to define the functions of professions. These attempts typically centralise around some sort of moral or ethical foundation within the practice of a specific and usually established expertise.

This section is designed to give you an insight into some of the historic and academic ways of defining professions, as well as some regulatory perspectives as to how a group can ultimately become a profession.

Tasks performed by a housekeeper might include:

A.) check-in guests

B.) vacuum

C.) replace bedcovers

D.) dust

(please help :D)

Answers

Answer:

c and d

Explanation:

Answer:

b, c, or d................

Which of the following statements is correct? The dead weight loss caused by monopoly

Answers

The deadweight loss caused by monopoly is similar to the deadweight loss caused by a tax on a product

both mortgages and auto loans

A are riskier for lenders.
B are riskier for borrowers.
C require a down payment in general.
D require minimum payments.​

Answers

both mortgages and auto loans require minimum payments.

Answer:

C

Explanation:

require a down payment in general

What are some actions that may be taken by a nation to reduce interest rates in a country

Answers

Answer:

If needed, the Federal Reserves has the ability to lower interest rates.

Explanation:

PLEASE ANSWER THESE 3 QUESTIONS I WILL GIVE BRAINLIEST

Answers

Answer:

Times of maximum fear is the best time to buy stocks, while times of maximum greed are the best time to sell.

Explanation:

Behind the truism is the tendency of the markets to overshoot on both the downside and the upside. Part of the reason is a pure herd instinct that drives stock prices. The investor who takes an unbiased look at the market might be able to see the herd instinct at work and take advantage of the extreme ups and downs that it causes. That investor can buy low and sell high.

Unfortunately, it's easy to determine after the fact whether a price was too low or too high and even why. During the moment, it is monumentally difficult. Prices both affect and reflect the psychology and emotions of market participants.

For this reason, "buy low, sell high" can be challenging to implement consistently. Traders trying for a more objective view consider other factors to make a more informed decision. These factors include moving averages, the business cycle, and consumer sentiment.

Which government policy will create the following results?
- Price level falls
- Real GDP falls
- Unemployment rises

Answers

Answer:

Any type of government policy that restricts free trade and the movement of capital can trigger the aforementioned consequences. Thus, the limitation of companies to obtain economic benefits can make them decide to close their activities, leaving employees on the street (increasing unemployment), reducing the country's economic production (causing the country's real GDP to decrease), and ultimately, generating monetary lags due to lack of economic production, generating devaluations that lower the international price level of the country's products.

The closing balance of jubilee traders Inc trial balance is

Answers

A trial balance is a schedule for bookkeeping in which the balance of all ledgers is collected into equivalent debit and credit account column totals. A business annually prepares a trial balance, usually at the end of the reporting period. The general aim of creating a trial balance is to ensure that the entries are arithmetically accurate in the accounting system of a corporation.

PLEASE HELP :(
A transaction that involves investing cash in a business, why is it usually debited, shouldn't it be a decrease (credit)? Just a little confused.

Answers

Answer:

A transaction that involves the investment of cash in a business is debited because

1) For a business to invest cash for their expansion, involves the reduction of finances in the available revenue or profit for the purchase of equipment, property and software for internal use, for which money has to be drawn, which is a form of b=debit

2) For an owner investing money into his business, is taken as an increase in the amount the business owes the owner, which is equivalent to amount owed the owner which has to be recorded as a debit for financial accounting

Explanation:

Jonathan is applying for a new credit card. His credit rating is average. Which APR should he expect after the introductory period? (5 points)
8.99%

10.99%

12.99%

14.99%

Answers

Answer:

10.99

Explanation:

When someone like Jonathan with an average credit rating applies for a newer credit card, he should be expecting an APR of 10.99% on his credit card. Therefore, the option B holds true.

What is the significance of credit rating?

A credit rating is a phenomenon or a factor that determines the credibility of an individual. Such credit rating is often checked while applying for loans and advances or credit limit through devices like credit cards. Credibility is higher is the rating is higher and vice versa.

If someone has an average credit rating, and they haven't applied for a credit card yet, they are eligible to get a credit cards for an interest APR of as low as 10.99%. Thus, it can be considered as an ideal rate of APR.

Therefore, the option B holds true regarding the significance of credit rating.

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1. Which is the common factor of 24 and 32?
D. 32
D. 28
D. 19
A 8
B. 16
C. 24
2. What is the greatest common factor of 14 and 567
A7
B. 14
C. 21
3. What is the greatest common factor (GCF) of 16 and 24?
A. 6
B.8
C. 12
4. Which of the following is the greatest common factor of 28 and 367
A. 4
B.7
C. 8
5. The following numbers are common factors of 28 and 56 except?
A. 7
B. 14
C. 8
6. What is the Least Common Multiple (LCM) of 7 and 87
D.9
D. 28
A. 56
B. 68
C. 84
D. 146
7. What is the least common multiple of 6 and 147
A. 42
B.54
C.76
D.84
8. What is the least number of carpenters that an engineer must hire If he wants to
arrange them in groups of 4, 5, 6 with no left over?
A. 120
B.150
C.60
D.240
9. During a car race, two competitors will stop to fill up the fuel tank. One does it
every 4 laps, and the other every 5 laps. If they travel at the same speed, how
many laps will they meet again at the fuel station?
A. 16
B. 20
C.25
D. 30
10. What is the least common multiple (LCM) of 12 and 14?
A. 54
B. 68
C. 84
D. 146
please answer me please ​

Answers

Answer:65

Explanation:

Answer:

8

Explanation:

Brainliest and 50 points!!!

Why would an employer ask about an applicant’s honors, awards, and activities?

Respond in 3-4 well written sentences:

Answers

Answer:

Explanation:

To show that you have special skills and what your areas of expertise are.

Answer:

There are multiple reasons employers would want to know about honors, awards, and activities. The first reason is to see if you are hard-working or not, if you have many awards and whatnot, employers will see that you have a good drive to get things done, clubs and activity you’ve participated in shows that you’re a team worker. It can also show your areas of expertise and can show your special skills and abilities.

Explanation:

I took the last part from the other answer but I do flvs career research and this was correct for me

HELP ASAP !! Matilda just started her first job. She has some difficulty saving money, but she knows she must do it. Which of the following is the best option to start saving for retirement now?
She can choose a low-interest account.
She can contribute to her employer's matching benefit.
She can enroll in a 529 plan.
She can sign up for a pre-paid plan.

Answers

Answer:

She can contribute to her employer's matching benefit.

Explanation:

The best way for Matilda to save is to have the amount she intends to save deducted from her basic salary. By doing this, she will not have direct access to the money, so she cannot spend it. If her employer has a savings matching scheme, then Matilda should join it.  Her savings account will grow faster due to her employer's contributions.

A low-interest account will discourage her from saving. The 529 schemes are designed to save money to cater to post-secondary education.

Answer: (B) She can contribute to her employer's matching benefit.

Which situations best demonstrate likely tasks for Business Financial Management workers? Check all that apply.
Marcy helps a family create a budget that allows them to save up for buying a house.
Caleb researches possible cases of fraud and takes notes on what he finds out.
Selena processes customer transactions at a bank.
Jung creates a report with charts to show how a company's money is being spent.
Owen sells automobile insurance policies to people.
Alonzo advises companies about investment strategies.

Answers

Answer:

its

b, the caleb one

d, the jung one

d, the Alonzo one

Caleb investigates potential fraud situations and makes notes on his findings. In order to show how a company's money is being spent, Jung develops a report using charts. show potential tasks for those working in business financial management. Thus option (B, C) is correct.

What is management?

In order to achieve desired goals and objectives, a person or group of people must be challenged and managed, according to the concept of management. Furthermore, the capacity to organize, supervise, and guide people is a component of management.

Managing telephone costs, employing new employees, purchasing facilities, creating project budgets, etc. are a few examples of financial management for a corporation or firm. financial administration

Therefore, Thus, option (C) is correct.

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For lunch, a restaurant discounts prices on their menu by 15% and then applies a10% sales tax to the discounted price. If Jade pays $18.70 after the discount andsales tax are applied, what was the price of Jade's lunch on the menu?A $17.48B $19.35C $19.68D $20.00 Katy swim team is having an end-of-season pizza party when the party started doing 50 slices of pizza now there's 20 sizes love which of the following shows how much pizza has been eaten select all that apply How do archaeologists known that the Harappan civilization traded? Tools is used to collect the animal manure from the grounds What needs to happen for recessive traits to be observed in an organism? 8/0Undefined, positive, negative, zero ? What attracts the electrons from the atom on the left?The neutrons from the atom on the leftThe electrons from the atom on the rightThe protons from the atom on the rightThe neutrons from the atom on the right I need help asap, thank you. PLZ HELP HURRY !!!!!! How many days are in an Earth year? Can you please answer questions 3 and 7 Hillary is sharing a box of candy with her friends. If there are b pieces of candy in the box being split between 5 people, which expression shows how many pieces of candy each person should get? identify two different challenges faced by early inhabitants of Louisiana and explain how each challenge had to be overcome in order for these groups to survive. please help im super behind and trying to get caught up What is the unit rate for 3 inches of rain in 6 hours? add and reduce 5 + 3 1/2 How does an adult sponge asexually reproduce? Liam can type 558 words in 9 minutes. How many words can Liam type per minute? True or False The expression 1/i written in a+bi form is -i PLS HELP ME! THIS IS DUE TODAY! 7TH GRADE HISTORY! THE TEXAS RESOLUTION!One example that helps explain how Santa Anna inspired his men to fight is through his speech on the Nueces River. In Document A, Santa Anna claims that the Texans have ____________________, and that the _______________________________ will be punished. Furthermore, Santa Anna uses very descriptive language to describe his opponents such as _____________________, ___________________, and ______________________. These words portray the Texans as _______________ and _______________. The strong language used by Santa Anna clearly supported the Texans idea that the Mexican government no longer supported them. He inspired his men by__________________________.