You must make a choice between the following three sets of non-callable bonds. Foreach set, select the bond that would be best for your portfolio, given your interest rate outlook and the consequent strategy set forth in Part a. In each case, briefly discuss why you selected the bond. (6 marks) Bond Maturity Coupon Yield to Maturity Set 1 A 20 years 10% 10% B 20 years 6% 8% Set 2 C 20 years 6% 10% D 15 years 8% 10% Set 3 E 17 years 12% 12% F 20 years 12% 8% 5
TIE RATIO AEI Incorporated has $5 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) ratio is 10%, and its return on assets (ROA) is 5%. What is AEI’s timesinterest-earned (TIE) ratio?
The following portfolios are being considered for investment. During the period under consideration, RFR = 0.07. Portfolio Return Beta si A 0.15 1.0 0.05 B 0.20 1.5 0.10 C 0.10 0.6 0.03 D 0.17 1.1 0.06 Market 0.13 1.0 0.04 a. Compute the Sharpe measure for each portfolio and the market portfolio.
Compute the Treynor measure for each portfolio and the market portfolio
Rank the portfolios using each measure, explaining the cause for any differences you find in the rankings.
Assume a US bank has a small portfolio of Euro’s what sort of exchange rate movement would the bank be most concerned about?