8) At your corporate finance desk, you are asked to hedge a cash-flow stream (in Smn) that your company expects to receive over the next 3 years: {10, 20, 30). The interest rate is r = 10% and assume continuous compounding throughout.

A) What is the "price" (present value) of this cash-flow stream?

B) Determine the PV01, the rate of change of the price for a 1 bp (1/100 of 1%) change in r

C) Ten-year zero-coupon bonds, with a face-value of $1000, are priced at $497. How many would you buy or sell to immunize the cash-flow stream from interest rate risk?

Please povide a solution to all parts, thank you in advance.

8) (20 pts) At your corporate finance desk, you are asked to hedge a cash-flow stream (in $mn) that your company expects to receive over the next 3 years: {10, 20, 30). The interest rate is r = 10% and assume continuous compounding throughout. A) What is the "price" (present value) of this cash-flow stream? B) Determine the PV01, the rate of change of the price for a 1 bp (1/100 of 1%) change in C) Ten-year zero-coupon bonds, with a face-value of $1000, are priced at $497. How many would you buy or sell to immunize the cash-flow stream from interest rate risk? 8) (20 pts) At your corporate finance desk, you are asked to hedge a cash-flow stream (in $mn) that your company expects to receive over the next 3 years: {10, 20, 30). The interest rate is r = 10% and assume continuous compounding throughout. A) What is the "price" (present value) of this cash-flow stream? B) Determine the PV01, the rate of change of the price for a 1 bp (1/100 of 1%) change in C) Ten-year zero-coupon bonds, with a face-value of $1000, are priced at $497. How many would you buy or sell to immunize the cash-flow stream from interest rate risk