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Pension funds pay lifetime annuities to recipients If a firm remains in business indefinitely, the pension obligation will resemble a perpetuilly. Suppose, therefore, that you

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Pension funds pay lifetime annuities to recipients If a firm remains in business indefinitely, the pension obligation will resemble a perpetuilly. Suppose, therefore, that you are manaping a permitind with stations to make perpetual payments of $3.0 million per year to beneficiaries The yield to malurity on all bonds is 20% a. If the duration of 5-year maturity bonds with coupon rates of 12% (paid annually) is 3.9 years and the duration of 20 year maturilly bonds with coupon rates of 6% (paid annually) in 67 yamuth each of these coupon bonds (in market value) will you want to hold to both fully fund and immunize your obligation? (Do not found intemediato calculations. Enter your answers in millions rounded to decide Holdinad 5-year bond million 20-year bond million b. What will be the par value of your holdings in the 20-year coupon bond? (Enter your answer in dollars not in millions. Do not found interidiate calculations. Round your way the Par value

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