Question
Company XYZ has a liability of $60,000 that is due in 3 years. The company could invest in zero-coupon bonds to be immunized against the
Company XYZ has a liability of $60,000 that is due in 3 years. The company could invest in zero-coupon bonds to be immunized against the liability. Bond X is a 1-year zero coupon and Bond Y is a 5-year zero coupon bond. Company XYZ plans to invest in Bond X and Bond Y. How much should Company XYZ invest in Bond X, assuming an effective interest rate of 5%?
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Financial Management Of Health Care Organizations
Authors: William N. Zelman, Michael J. McCue, Noah D. Glick, Marci S. Thomas
5th Edition
1119553849, 9781119553847
