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Joe must pay liabilities of 1,000 due six months from now and another 1,000 due one year from now. There are two available investments: A

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Joe must pay liabilities of 1,000 due six months from now and another 1,000 due one year from now. There are two available investments: A six-month bond with face amount of 1,000,8% nominal annual coupon rate convertible semiannually, and 6% nominal annual yield rate convertible semiannually. A one-year bond with face amount of 1,000,5% nominal annual coupon rate convertible semiannually, and 7% nominal annual yield rate convertible semiannually. How much of the six-month bond and the one-year bond respectively should Joe purchase to exactly (absolutely) match the liabilities? Possible Answers A 1,97561 B.93809.1 C.97561, 93809 D 93809, 97561 E .96154, .97561 Joe must pay liabilities of 1,000 due six months from now and another 1,000 due one year from now. There are two available investments: A six-month bond with face amount of 1,000,8% nominal annual coupon rate convertible semiannually, and 6% nominal annual yield rate convertible semiannually. A one-year bond with face amount of 1,000,5% nominal annual coupon rate convertible semiannually, and 7% nominal annual yield rate convertible semiannually. How much of the six-month bond and the one-year bond respectively should Joe purchase to exactly (absolutely) match the liabilities? Possible Answers A 1,97561 B.93809.1 C.97561, 93809 D 93809, 97561 E .96154, .97561

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