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6 ) A company must pay liabilities of 1 0 0 0 at the end of year 1 and X at the end of year
A company must pay liabilities of at the end of year and X at the end of year The only investments available are: i Oneyear zerocoupon bonds with an annual effective yield of ii Twoyear bonds with a par value of and annual coupons, with an annual effective yield of The company constructed a portfolio that creates an exact cash flow matching strategy for these liabilities. The total purchase price of this portfolio is Calculate the amount invested in the oneyear zerocoupon bonds.
A company must pay liabilities of at the end of year and X at the end of year
The only investments available are:
i Oneyear zerocoupon bonds with an annual effective yield of
ii Twoyear bonds with a par value of and annual coupons, with an annual effective yield of
The company constructed a portfolio that creates an exact cash flow matching strategy for these liabilities. The total purchase price of this portfolio is Calculate the amount invested in the oneyear zerocoupon bonds.
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