FIN 364 Week 4 Discussion 1 | Devry University

FIN 364  Week 4 Discussion | Devry University

Week 4: Bonds and Bond Duration

Suppose you have a goal of starting a new business 3 years from now and must accumulate enough funds for this project. You decide to invest in bonds but you are concerned about interest rate risk. How can duration be used to estimate and manage interest rate risk? How can the duration of a bond portfolio be adjusted? Why might an institution or investor want to do this?

 

 

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