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A company must pay liabilities of $ 3 0 0 in one year, $ 5 0 0 in two years and $ 6 0 0
A company must pay liabilities of $ in one year, $ in two years and $ in three years. The only investments available are :
year zero coupon bonds
year annual coupon bonds maturing at par
year annual coupon bonds maturing at par
The company purchases a combination of these bonds to exactly match its liablities. How much should the company invest in the year bond given an annual effective rate of interest of
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