VERTEX EVALUATES POTENTIAL TRADES USING TOTAL RETURN ANALYSIS
3. Vertex evaluates potential trades using total return analysis. Total return analysis
assesses the expected effect of a trade on total portfolio return based on an interest
rate forecast. For example, Vertex recently evaluated the expected total return for a
single bond, with a beginning price of $103, a 5% semiannual coupon, an expected price
at the end of one year of $102.5, and an annual reinvestment rate of 2%.