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Please answer the B part. Working is not required. Thanks My pension plan will pay me $17,000 once a year for a 10-year period. The
Please answer the B part. Working is not required. Thanks
My pension plan will pay me $17,000 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. a. What is the duration of its obligation to me? The current interest rate is 11.0% per year. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Answer is complete and correct. years 8.6544 Duration 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? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Answer is complete but not entirely correct. Investment 5-year zero-coupon bond 84 20-year zero-coupon bond 130 My pension plan will pay me $17,000 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. a. What is the duration of its obligation to me? The current interest rate is 11.0% per year. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Answer is complete and correct. years 8.6544 Duration 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? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Answer is complete but not entirely correct. Investment 5-year zero-coupon bond 84 20-year zero-coupon bond 130Step by Step Solution
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