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An insurance company must make a payment of $25,937 in ten years and the market interest rate is 10%. The company's portfolio manager wishes to

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An insurance company must make a payment of $25,937 in ten years and the market interest rate is 10%. The company's portfolio manager wishes to fund the obligation using seven-year zero-coupon bonds and perpetuities paying annual coupons. Which of the following is the appropriate combination? A. 25% of seven-year zero-coupon bonds and 75% of perpetuities B. 50% of seven-year zero-coupon bonds and 50% of perpetuities C. 75% of seven-year zero-coupon bonds and 25% of perpetuities D. None of the above

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