Financial Planning Questions

sanmao333

Hi guys,

Who can give a hand?

I have two questions:
1. regarding the entitlement to Age Pension, normally,should we assess both income test and asset test to see which is lowest and then it will be paid?
2. regarding the interest rate and bond price, if the interest rate goes up, the bond price will drop down, does that mean if the interest rate increases by 2%, the bond price will decrease by 2%?
thanks

双喜临门

1：学过，忘了。

2：In an ideal world, yes.

thysxd

for the 2nd questions, the price movement is based on the bond modified duration. The longer the duration, the more impact on the bond price change.

For example, if the bond modified duration is 5 years, the bond price will drop by 10% if the interest rate increase by 2%

loansmart

双喜临门 发表于 2014-1-16 23:18
1：学过，忘了。

2：In an ideal world, yes.

thx so much.

do you still keep a copy of SOA assignment?

I'm struggling for that. could you send me a copy?

thx again.

loansmart

thysxd 发表于 2014-1-16 23:38
for the 2nd questions, the price movement is based on the bond modified duration. The longer the dur ...

thanks!

got it!