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iv) A company must pay liabilities of 2,000 at the end of one year, 3,000 at the end of two years, and 5,500 at the

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iv) A company must pay liabilities of 2,000 at the end of one year, 3,000 at the end of two years, and 5,500 at the end of three years. The company exactly matches the liabilities by buying the three bonds described below: All three bonds have par values of 1,000 and will be redeemed at par. v) Calculate the amount of each bond to purchase, the total cost of the bonds required to malch the liability cash flows exactly, and the overall yield of the bond purchase. [8]

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