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PLEASE answer ASAP! Thank you! Will like! You are managing a portfolio of $2 million. Your target duration is 13.5 years, and you choose to
PLEASE answer ASAP! Thank you! Will like!
You are managing a portfolio of $2 million. Your target duration is 13.5 years, and you choose to invest in a combination of a zero coupon bond with maturity six years and a perpetuity, each currently yielding 5%. The amounts of investment in the zero coupon and the perpetuity should be: A. $625,000 and $1,375,000 respectively B. $1,375,000 and $625,000 respectively C. $1,000,000 and $1,000,000 respectively D. $2,000,000 and $0 respectively E. None of the above Step by Step Solution
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