A $200 million bond portfolio currently has a modified duration of 6.53. In anticipation of a decline in interest rates, the portfolio manager seeks to increase the modified duration of the portfolio to 9.5 by using a Treasury bond futures contract priced at 95,650. The futures contract has an implied modified duration of 12.65 the portfolio manager has estimated the yield beta of her portfolio to be 1 relative to the implied yield on the futures contract. Required:
a. Indicate whether the portfolio manager should enter a short or long futures position.
b. Calculate the number of contracts needed to change the duration of the bond portfolio.
c. Assume that on the horizon date, the yield on the bond portfolio has increased by 30 basis points and the portfolio value has decreased by $3,929,754. The implied yield on futures has increased by 30 basis points, and the futures contract is priced at $ 92,616. Calculate the overall gain on the position (bond plus futures). Determine the ex post duration with and without the futures transaction.

Is exploiting a distinctive competence or improving efficiency for competitive advantage. (a) cooptation (b) coalition (c) competitive intelligence (d) competitive aggression (e) smoothing

Cardinal company is considering a project that would require a $2,725,000 investment in equipment with a useful life of five years. at the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. the company’s discount rate is 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)

What additional information about the numbers used to compute this ratio might be useful in you assess liquidity? (select all that apply) (a) the maturity schedule of current liabilities (b) the average stock price for the industry (c) the average current ratio for the industry (d) the amount of current assets that is concentrated in relatively illiquid inventories