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ootstrapping. Complete problem 31 of Chapter 10 (shown below), and submit to your instructor. Show your calculations and the algebraic manipulation of the price equation for the bond. In addition to solving the problem, write a 100 to 200 word essay on the term structure of fixed income securities.
One method used to obtain an estimate of the term structure of interest rates is called bootstrapping. Suppose you have a oneyear zero coupon bond with a rate of r1 and a twoyear bond with an annual coupon payment of C. To bootstrap the twoyear rate, you can set up the following equation for the price (P) of the coupon bond:
Because you can observe all of the variables except r2, the spot rate for two years, you can solve for this interest rate. Suppose there is a zero coupon bond with one year to maturity that sells for $949 and a twoyear bond with a 7.5 percent coupon paid annually that sells for $1,020. What is the interest rate for two years? Suppose a bond with three years until maturity and an 8.5 percent annual coupon sells for $1,029. What is the interest rate for three years?
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This Tutorial contains 2 Papers
Focus of the Final Project
The student will construct a welldiversified portfolio using an initial investment stake of $50,000 (the portfolio should use 95% of the fund, but they may not use more than $50,000). The student may include..

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Option Strategies. Complete Concept Question 12 from Chapter 15: Recall the options strategies of a protective put and covered call discussed in the text. Suppose you have sold short some shares of stock. Discuss analogous option strategies and how you would implement them. (Hint: They’re called ..

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Hedging with Futures. Complete Concept Question 7 from Chapter 14: The town of South Park is planning a bond issue in six months and Kenny, the town treasurer, is worried that interest rates may rise, thereby reducing the value of the bond issue. Should Kenny buy or sell Treasury bond futures con..

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BUS 405 Week 4 Quiz Chapters 1113
300 Question Set
..

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Portfolio Weights. Complete Problem 10 from the Questions and Problems section of Chapter 12: A stock has a beta of .9 and an expected return of 9 percent. A riskfree asset currently earns 4 percent.
a. What is the expected return on a portfolio that is equally invested in the two asse..

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Expected Returns and Deviation. Complete Problems 1, 2, and 3 from the Questions and Problems section of Chapter 11 (shown below). Remember to complete all parts of the questions, and report the results of your analysis. Respond to at least two of your classmates’ postings outside of your own..

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Performance Metrics. Complete Problem 22 in the Questions and Problems section of Chapter 13 (shown below). When you pick the best choice for your portfolio, defend your decision in a 100  200 word essay.
You have been given the following return information for two mutu..

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BUS 405 Week 3 Quiz Chapters 910
200 Question Set
..

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Bond Prices versus Yields. Complete Concept Question 9 of Chapter 10: (a) What is the relationship between the price of a bond and its YTM? (b) Explain why some bonds sell at a premium to par value, and other bonds sell at a discount. What do you know about the relationship between the coupon rat..

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Forward Interest Rates. Complete Problem 16 from the Questions and Problems section of Chapter 9: According to the pure expectations theory of interest rates, how much do you expect to pay for a oneyear STRIPS on February 15, 2011? What is the corresponding implied forward rate? How does your an..

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ootstrapping. Complete problem 31 of Chapter 10 (shown below), and submit to your instructor. Show your calculations and the algebraic manipulation of the price equation for the bond. In addition to solving the problem, write a 100 to 200 word essay on the term structure of fixed income securitie..

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BUS 405 Week 2 Quiz Chapters 58
400 Question Set
..

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Contrarian Investing. Complete Concept Question 9 from Chapter 8: What does it mean to be a contrarian investor? How would a contrarian investor use technical analysis? Post your answers to the discussion board. Remember to complete all parts of the question and support your answers with examples..

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Primary and Secondary Markets. Complete Concept Question 1 from Chapter 5: If you were to visit your local Chevrolet retailer, there is both a primary and a secondary market in action. Explain. Is the Chevy retailer a dealer or a broker? Remember to complete all parts of the question and support ..

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Abbott Laboratories Problem. After reading the Value Line figures and information on Abbott Laboratories in the Questions and Problems section of Chapter 6 (just before Problem 27), complete Problems 27, 28, 29, 30, and 31 and submit to your instructor. Show your calculations and in your resp..

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BUS 405 Week 1 Quiz Chapters 14
400 Question Set
..

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Money Market Funds. From Chapter 4, complete Problem 4: The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 2.5 percent. If you had invested $50,000 in this fund at the start of the year, how many shares would you..

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Blume’s Formula, Allocation, and Selection. From Chapter 1, answer Concept Question 5: What is Blume’s formula? When would you want to use it in practice? Also, from Chapter 2, answer Concept Question 4: What is the difference between asset allocation and security selection? Remember to complete ..

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Annualized Returns. Complete problem 18 in Chapter 3 (shown below) and submit to the instructor. Show your work to find the annualized return for each of the listed share prices. Write a 100 word analysis of the process to calculate these annualized returns.
Suppose you have $28,000 to ..

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BUS 405 Week 1 DQ 1 Blumes Formula, Allocation, and Selection
BUS 405 Week 1 DQ 2 Money Market Funds
BUS 405 Week 1 Quiz Chapters 14
BUS 405 Week 1 Assignment Annualized Returns Chapter 3 problem 18
BUS 405 Week 2 DQ 1 Primary and Secondary Markets
BUS 405 Week 2 DQ 2 ..
