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B ) Your firm wants to immunize its liability position by buying a combination of zero - coupon bonds with two years until maturity and

)

Your firm wants to immunize its liability position by buying a combination of zero

-

coupon

bonds with two years until maturity and

6 %

dividend perpetuities with an

8 %

yield to maturity.

What percentage of the firm's portfolio should you allocate to each, if these are the only two

assets funding the plan? How much money should you invest in each?

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