A company needs to immunize several future contractual payments up till end of 10 years from now. The present value of the future cash flows is $465,000. Annualized money duration is $2,812,500. Convexity is 50. Three immunization bond portfolios as follows are considered. If the company chooses X, what would be the most important differentiating reason? Portfolio X Portfolio Y Portfolio Z Composition 20% each of 2-,3-,5-,7-10- year notes 20% 5-year, 20% 7-year, 60% 9-year notes 50% 2-year, 50% 10- year notes Market value $467.000 $477.200 $472.000 3.62% 3.65% 3.60% Cash flow yield Money duration Convexity 2,812.400 2.812,600 2.812,550 52 52 53 A company needs to immunize several future contractual payments up till end of 10 years from now. The present value of the future cash flows is $465,000. Annualized money duration is $2,812,500. Convexity is 50. Three immunization bond portfolios as follows are considered. If the company chooses X, what would be the most important differentiating reason? Portfolio X Portfolio Y Portfolio Z Composition 20% each of 2-,3-,5-,7-10- year notes 20% 5-year, 20% 7-year, 60% 9-year notes 50% 2-year, 50% 10- year notes Market value $467.000 $477.200 $472.000 3.62% 3.65% 3.60% Cash flow yield Money duration Convexity 2,812.400 2.812,600 2.812,550 52 52 53