Problems
Q.1 Consider a five-year coupon bond with a face value of $1000 paying an annual coupon of 15%. (i) If the current market yield is 8%, what is the bond’s price? (ii) If the current market yield increases by 1% what is the bond’s new price? (iii) Using your answers to part (i) and (ii) , what is percentage change in the bond’s price as a result of 1% increase in interest rates.

Q.2 Consider the following FI balance sheet:
M. Match Ltd
Assets| Liabilities|
2 –year Treasury bond $175,000| 1-year CD$135,000| 15-year corporate bond$165,000| 5-year deposit$160,000|

Notes: All securities are selling at par (equal to book value). The two-year Treasury bonds yield 5%; the 15-year corporate bonds yield 9%; the one-year CD issue pays 4.5% and the five-year deposit pays 8%. Assume that all instruments have annual coupon payments.

(a) What is the value of M. Match Ltd’s equity?
(b) What is the weighted average maturity of FI’s assets? (c) What is the weighted average maturity of FI’s liabilities? (d) What is the FI’s maturity gap?
(e) What does your answer to part (d) imply about the interest rate risk exposure of M. Match Ltd? (f) Calculate the values of all four securities on M. Match Ltd’s balance sheet if all interest rates increase by 2%. (g) What is the impact on the equity of M. Match Ltd? Calculate the percentage change in the value of equity. (h) What would be the impact on M. Match Ltd’s risk exposure if its liabilities paid semi-annually as opposed to annually?

Q.3 An insurance company issues a $100,000 one-year bond paying 7% annually in order to finance the acquisition of a $100,000 one-year corporate loan paying 9 % semi-annually. (a) What is the insurance company’s maturity gap? What does the maturity model state about interest rate risk exposure given the insurance company’s maturity gap?

(b) Immediately after the insurance company makes these investments, all interest rates increase...

...Practical 7
Title:
Introduction to preparing standardized solutions and making dilutions
Introduction:
A solution is a mixture of two or more substances uniformly dispersed through a single phase, so that the mixture has the same composition throughout. A solution may be a solid dissolved in a liquid. A solution is comprised of a solvent and a solute, where: the solvent is the liquid in which the solid dissolves (Water is the most...

...permanganate (KMnO4) solution by finding its absorbance through the use of spectrophotometer. The preparation of four known concentration of KMnO4 was done namely, 2.00×10-4M, 1.50×10-4M, 1.00×10-4M, 5.00×10-5M, respectively and is to be place on the spectrophotometer with the unknown and distilled water for the determination of each concentration’s absorbance. As the concentration is proportional with the absorbance of the solution, to determine the concentration...

...Depression in Solutions
The freezing point of pure water is 0°C, but that melting point can be depressed by the adding of a solvent such as a salt. The use of ordinary salt (sodium chloride, NaCl) on icy roads in the winter helps to melt the ice from the roads by lowering the melting point of the ice. A solution typically has a measurably lower melting point than the pure solvent.
The following figures were found in a published report, but have not been checked...

...
Purpose
The purpose of this experiment is to find out the molarity of each solution while finding out how many grams of sodium chloride we have.
Materials
1. Wire gauze
2. tongs
3. Burner
4. balance
5. Matches
6. hot hands
7. ring stand
8. ring clamp
9. graduated cylinder
10. evaporating dish
Procedure
Steps:
1. Mass the evaporating dish
2. Record how many mL of solution you add into the evaporating dish then mass them...

...Synergetic Solutions Report
This paper will discuss the internal and external forces of change for Synergetic Solutions. The report will show the factors that the leader in this organization needs to consider to implement a change strategy successfully and it will describe at least two change models the leader might employ. And we will evaluate the communication necessary to implement change using these models. The paper will show what kinds of resistance might...

...Directions Using the formula for dilutions, write the recipe to make 100 mL of a new solution of each solute based on having as much of the initial solution as you need. V1 M1 V2M2 SoluteFormula of SoluteInitial Concentration (M)Final Concentration (M)Recipe For 100 mL of New SolutionSodium hydroxideNaOH1.0 M0.27 M(1.0M)(VNaOH) (0.27 M)(100 mL) VNaOH 27 mL Dilute 27 mL of 1.0 M NaOH to 100 mL.Potassium...

...Abstract
This laboratory involved utilizing equipment to dilute a sugar water solution. It also created solutions containing varying levels of concentrations and densities. Equations were used to figure the molecular weight of the sugar, and the number of moles of sugar in the volumetric flask. There was also an equation to figure the Molarity, as well. As a result of the experiment, I now have a better understanding of the density of a concentration, and what...

...Mixtures and Solutions can often become confusing because solutions are mixtures, but not all mixtures are solutions. A mixture can either be homogeneous or heterogeneous. A homogeneous mixture is where the mixture’s components are distributed uniformly within the mixture. A heterogeneous mixture is where the components are not uniform. Mixtures can either be miscible or immiscible, the difference being whether or not the mixture forms a homogeneous...