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A company buys a 7-year zero coupon bond that will mature for $11000. It plans to use this asset to make two payments to a
A company buys a 7-year zero coupon bond that will mature for $11000. It plans to use this asset to make two payments to a customer, the first payment X in one year and the second payment Y in 8 years.
Determine the amounts X and Y in order to satisfy the first two conditions of Redington immunization given an effective annual interest rate of 6%.
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