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An insurance company must pay liabilities of 95 at the end of one year, 105 at the end of two years and 100 at the

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An insurance company must pay liabilities of 95 at the end of one year, 105 at the end of two years and 100 at the end of three years. The only investments available to the company are the following three bonds. Bond A and Bond Care annual coupon bonds. Bond B is a zero-coupon band. All three bonds have a par value of 100 and will be redeemed at par. Calculate the number of units of Bond A that must be purchased to match the liabilities exactly. Bond Maturity (in years) Yield-to-Maturity (Annualized) A B A. 0.8341 units 1 2 3 Coupon Rate 3% 0% 10% 7% 99 B. 0.8761 units C. 0.9278 units OD. 0.9523 units E. 1.0286 units

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