A fixed income portfolio manager is evaluating investments in the mortgagemarket but i

ion rate.

Tina Mo, a fixed income analyst, is asked to value a single, default-free cash flow of $60,000. She is given the information in the following table:

The value of this single cash flow at the end of Period 4 is closest to:

A. $56,427

B. $56,309

C. $56,276

e. The duration of her portfolio is closest to:

A. 9.24

B. 9.60

C. 28.81

A.the government fixes the maximum rate that can be paid on bonds.

B.they are held predominantly by older people who are living on fixed incomes.

C.they pay a fixed amount at maturity.

D.they promise either a fixed stream of income or a stream of incomedetermined by a specific formula.

E.they were the first type of investment offered to the public, which allowedthem to “fix” their income at a higher level by investing in bonds.

sk free rate over a five-year period:

The security is most likely a(n):

A. step-up note.

B. inverse floater.

C. deferred coupon bond.

to 102.98 ifinterest rates decrease 0.25% and fall to 100.91 if interest rates increase 0.25%. The security’s effective duration is closest to:

A. 3.98

B. 4.07

C. 4.87

A．weekends and holidays

B．the flat price of an issue

C．time value of coupon payments

ond’s duration is 5.4 and the current market value is $4,125,000. The dollar duration of the bond is closest to:

A.200,000.

B.216,000.

C.222,750.

nding prices for a hypothetical 10-year option-free bond which initially yields 8%:

Using a 10 basis point rate shock, the duration of this bond is closes to:

A. 8.78

B. 17.56

C. 4.39