As the bond portfolio manager you are concerned about the impact of changing interest rates on your portfolio value.
Use the information below and excel functions to determine the value of the current bond portfolio, the portfolio yield and the portfolio duration. this assignment you are assigned a portfolio of bonds.
Assuming that insterest rate changes will impact all bonds equally what is the value of the bond portfolio if interest rates increase by 0.25% or 0.5%?
From the additional bonds provided, which bond, if added to the bond portfolio will help insulate the portfolio from interest rate risk?
| Issuer Name |
Coupon |
Coupons/Year |
Maturity |
S&P |
Yield |
Date |
Price |
Face Value |
Quantity of Bonds in Portfolio |
Total Value |
Portfolio Yield |
Portfolio Duration |
| Coca Cola Co |
3.200% |
2 |
11/1/2023 |
AA- |
2.127% |
10/6/2016 |
$ 104.12 |
$ 100.00 |
500 |
|
|
|
| IBM |
1.625% |
2 |
5/15/2020 |
AA- |
1.608% |
10/6/2016 |
$ 100.06 |
$ 100.00 |
400 |
|
|
|
| Apple Inc |
3.450% |
2 |
2/9/2045 |
AA+ |
3.707% |
10/6/2016 |
$ 95.52 |
$ 100.00 |
900 |
|
|
|
| Wal-Mart Stores Inc |
7.550% |
2 |
2/15/2030 |
AA |
2.870% |
10/6/2016 |
$ 151.58 |
$ 100.00 |
250 |
|
|
|
| Johnson & Johnson |
5.150% |
2 |
7/15/2018 |
AAA |
1.098% |
10/6/2016 |
$ 107.05 |
$ 100.00 |
75 |
|
|
|
Attachment:- excel-project.xlsx