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b . Pershing Square Associates ( PSA ) munt pay tibbilities of $ 4 , 0 0 0 due 6 months from now and another
b Pershing Square Associates PSA munt pay tibbilities of $ due months from now and
another due I year from now. Leea & Perrins investment Co is willing to sell him
the following rwo investments:
How much of each bond should PSA purchase in order to exactly, absolutely match
replicate the cash flows of the liabilities?
What is PSA's total cost of purchasing the bonds?
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