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financial derivatives 1. You are given a portfolio of bonds with value P= 100 and duration DP=1. There are two securities available for hedging, the

financial derivatives

1. You are given a portfolio of bonds with value P= 100 and duration DP=1. There are two securities available for hedging, the first has a price of F1=95 and duration DF1=0.8 and the second with a price of F2=92 and duration DF2=1.2. Suggest a duration based hedging strategy for portfolio P. State all of your assumptions

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