14 4. GICL has a fixed obligation to pay 5,00,000 to one of its employees at the end of 5 years from now with 8% interest. The company chooses to fund its obligation with 5,00,000 of 8% annual coupon bonds, selling at par with 6 years to maturity. Show how the fund will immune itself from interest rate changes to 7% immediately after the purchase of this bond. Also, show the workings when the interest rate changes to 9%