| The purpose of this study is an analysis of the portfolio management and the basic concepts of interest and bond valuation. The paper begins with the establishment of the elementary concepts of interest theory and annuity, followed by the basic principles of bonds. A bond and a loan problem are then proposed and solved with using spreadsheet. Linear Goal Programming models are formulated and solved to optimize the portfolio consisting of bonds. This is followed by an investigation of Economists Marcel Kahan and Bruce Tuckman's article, "Do bondholders lose from junk bond covenant changes?", an analysis of the theories they present in support of their viewpoint and, finally, a summary and presentation of conclusions. |
