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Please supply more detail and how to calculate YTM？The new PV？An insurance company has invested in the
Please supply more detail and how to calculate YTM？The new PV？
An insurance company has invested in the
following fixed-income securities: (a) $10,000,000 of five-year Treasury notes paying 5 percent interest and selling at par value, (b) $5,800,000 of 10-year bonds paying 7 percent interest with a par value of $6,000,000, and (c) $6,200,000 of 20-year subordinated debentures paying 9 percent interest with a par value of $6,000,000.
If interest rates change so that the yields on all of the securities decrease 1 percent, how does the weighted-average maturity of the portfolio change?
