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I know the answer is C i just dont know how, please show work 190. SOA Life Insurance Life Insurance Company has a portfolio of
I know the answer is C i just dont know how, please show work
190. SOA Life Insurance Life Insurance Company has a portfolio of two bonds: .Bond 1 is a bond with a Macaulay duration of 7.28 and a price of 35,000; and .Bond 2 is a bond with a Macaulay duration of 12.74 and a price of 65,000. The price and Macaulay duration for both bonds were calculated using an annual effective interest rate of 4.32% Bailey estimates the value of this portfolio at an interest rate of i using the first-order Macaulay approximation to be 105,000. Determine i. A. 3.49% B. 3.62% C. D. 3.92% E. 3.85% 4,03%Step by Step Solution
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