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17. Given the following information, we need to determine a cash flow matched portfolio using the universe of available bonds: Year of June 30 cash
17. Given the following information, we need to determine a cash flow matched portfolio using the universe of available bonds: Year of June 30 cash flow Liability amount Year of June 30 bond maturity Annual coupon Effective annual yield 2015 25 2015 10.0% 5.0% 2016 20 2016 7.5% 5.5% 2017 15 2017 65% 6.5% 2018 10 2018 5.0% 6.5% 2019 5 2019 4.0% 6.5% How much of the bonds maturing in 5 years and 1.5 years should be bought if the company wants to imunize itself using an exact matching of assets and liabilities strategy?
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