My pension plan will pay me $$10,500$ once a year for a $10-$year period. The first payment will come in exactly five years. The pension fund wants to immunize its position.

Required:

a$.$ What is the duration of its obligation to me$?$ The current interest rate is $5\mathrm{.}0\%$ per year.

b$.$ If the plan uses $5-$year and $20-$year zero$-$coupon bonds to construct the immunized position, how much money ought to be placed in each bond?

c$.$ What will be the face value of the holdings in each zero?

Complete this question by entering your answers in the tabs below.

Required $A$

What is the duration of its obligation to me$?$ The current interest rate is $5\%$ per year.

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Duration