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Company A has the following balance sheet in market values with duration in brackets Liabilities and Equity Assets Short-term debt 10 (2) 90 (15) Corporate

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Company A has the following balance sheet in market values with duration in brackets Liabilities and Equity Assets Short-term debt 10 (2) 90 (15) Corporate Loans 20 (5) 100 (14) Long-term debt Mortgages Equity 20 and company B has the following balance sheet in market values also with duration in brackets Liabilities and Equity Assets Short-term debt 40 (0) Government Bonds 80 (20) Cash (2) Longer-term debt 70 (25) 10 Equity 40 a. What is duration of equity of company A? b. What is duration of equity of company B? I c. You're the manager of company A. You decide to sell corporate loans and acquire equity of company B. How much equity should you acquire to make the equity of company A immune to interest rate shocks

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