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A company is attempting to immunize a schedule of liability cash flows via cash flow matching. The cash flows are as follows: Year Liability (
A company is attempting to immunize a schedule of liability cash flows via cash flow matching. The cash flows are as follows:
Year Liability s
Starting from the end and working forward, the company decides to match the year cash flow by investing in a year annual coupon bond, currently priced at per $ of par value.
What is the amount of face value of this bond that the company must buy to match the year liability?
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