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2) Assume that the pension plan hired a new actuarial team that revised the calculations in (1) and found that the present value of expected

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2) Assume that the pension plan hired a new actuarial team that revised the calculations in (1) and found that the present value of expected pension obligations in the next century is $150 million with a 22-year duration. You decide to utilize an immunization strategy for this obligation that exclusively involves two bonds J and K. Bond J is a 7-year bond paying a 5% annual coupon (annually). Bond K is a consol (perpetual) bond paying 10% annual coupon rate (annually). Both bonds have a 1,000 face value. How much money should the pension plan invest in each of the two bonds? Indicate the position the plan takes in each bond (long or short)

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