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1. (Matlab) Assume a bank receives the following liability schedule (numbers in dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Year
1. (Matlab) Assume a bank receives the following liability schedule (numbers in dollars) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 12,000 18,000 20,000 20,000 16,000 15,000 12,000 10,000 The bonds available for purchase today (Year 0), all with face values of 100, are given in the following table (coupon figures are annual): Bond 1 2 3 Price 102 99 101 Coupon 5 3.5 5 4 5 6 98 98 104 3.5 4 9 7 8 100 101 8 6 Maturity Year 1 2 2 3 4 5 5 6 9 10 102 94 9 7 7 8 Assuming all these bonds are widely available and can be purchased in any quantities at the stated price, use "linprog" in Matlab to find the least cost portfolio of bonds to purchase today to meet the obligations of the municipality over the next eight years.
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