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8.5 You want to construct a bond portfolio to immunize the interest-rate risk of a liability of $2,000 after 10 years. You have the
8.5 You want to construct a bond portfolio to immunize the interest-rate risk of a liability of $2,000 after 10 years. You have the choice of three annual coupon bonds with the following information: Bond 1 Bond 2 Bond 3 Coupon rate Face value 0% $100 Macaulay duration 12 years 3% $1,000 5% $1,000 8 years 9 years Which bonds can you choose to form the bond portfolio?
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
14th Global Edition
978-0273753872, 0273753878
