A fixedincome portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 4 4% per year

Question

A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 4.4% per year

over the next 5 years. The portfolio is currently worth $10 million. One year later interest rates are at 5.4%. What is the portfolio value trigger point at this time that would require the manager to immunize the portfolio?

$12,402,307

$10,049,398

$9,534,533

$10,440,000

Finance