Answer all the part A B C D question and show the step if needs.
A． First, you need to coordinate with your group to avoid duplication although this is a personal task. Choose a US stock/ETF from your StockTrak portfolio that your group has sold or still holds. What is the return of the stock in USD between buying and selling? Since you used CAD to conduct the investment, what is the impact of exchange rate risk? If it’s a stock you still own, then use today as the selling date. First, report the data below and then answer the question. You just need 4 numbers to take this question. You may use Excel but show your work.
Here is the information:
· Stock symbol and name: MDYG
· Buying date: 03/21/2021
· Buying price: $0.0893, USD/1.27, Price paid:76.09
· Buying date exchange: CAD 1 = USD ? (please calculated answer with step.)
· Selling date: 2021/4/1
· Selling price: 75.11
· Selling date exchange: CAD 1 = USD? (please calculated answer with step.)
Hint:
· Source of stock price: Your own StockTrak
· Source of exchange rate: Yahoo Finance
· https:
ca.finance.yahoo.com/quote/CADUSD%3DX/history?p=CADUSD% 3DX
B. We know that when yield rises, the bond price will drop, and the change can be estimated with duration. But when convexity is considered, things are not as bad; convexity is good news. How about the opposite case when yield drops? From a bond investor's point, is convexity good news or bad?
Hint: Use a chart to do your analysis and explain how convexity affects a bond holder when the yield drops. You must define the two axes.
C. Consider the following information for a portfolio manager. Did the fund outperform or underperform the policy portfolio and by how much? How much was due to the security selection effect?
D.
1. What’s in our toolbox for fixed-income risk management? (Hint: just bullet points, no need for explanation)
2. What is the cu
ent sovereign CDS premium of Mexico and Canada? What do those numbers mean?