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A company owes $10,000 to be paid at each of times 2, 3, and 4. The company plans to meet these obligations with an investment
A company owes $10,000 to be paid at each of times 2, 3, and 4. The company plans to meet these obligations with an investment program based on Redington immunization. This strategy will produce a cash flow of 'A' at time 1 and another cash flow of 'B' at time 5. The annual effective rate of interest is 12%. a) Determine A and B. (6 points)
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