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An insurance company must make a payment of $14000 in 4 years. Yields are currently at 5.2%. The companys portfolio manager wishes to fund the
An insurance company must make a payment of $14000 in 4 years. Yields are currently at 5.2%. The companys portfolio manager wishes to fund the obligation using one year zero-coupon bonds and perpetuities paying annual coupons. How much of the zero coupon bond will be purchased? Please give your answer in dollars rounded to two decimal places.
Hint: you need to solve for the weights on an immunized portfolio again.
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