Mathematics · Financial Aptitude
'Steady Income Debt Fund' has a portfolio consisting of three bonds: Bond A: Market Value 400 crore rupees, Macaulay Duration 2.5 years. Bond B: Market Value 400 crore rupees, Macaulay Duration 4.0 years. Bond C: Market Value 200 crore rupees, Macaulay Duration 6.0 years. The scheme has current liabilities of 20 crore rupees and accrued income of 10 crore rupees. The total number of units outstanding is 50 crore units. Calculate the current Net Asset Value (NAV), the Weighted Average Macaulay Duration of the portfolio, and the estimated percentage fall in the value of the bond portfolio if market interest rates rise by 1% (100 basis points).
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1NAV 20.20 rupees, Duration 3.5 years, Portfolio Fall 3.5 percent.
- 2NAV 19.80 rupees, Duration 4.0 years, Portfolio Fall 4.0 percent.
- 3NAV 20.00 rupees, Duration 4.2 years, Portfolio Fall 4.2 percent.
- 4NAV 19.80 rupees, Duration 3.8 years, Portfolio Fall 3.8 percent.✓
Correct answer
NAV 19.80 rupees, Duration 3.8 years, Portfolio Fall 3.8 percent.
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