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please do not copy the google solution since i donot undersatnd that solution thanks An insurance company must pay liabilities of 99 at the end
please do not copy the google solution since i donot undersatnd that solution thanks
An insurance company must pay liabilities of 99 at the end of one year, 102 at the end of two years and 100 at the end of three years. The only investments available to the company are the following three bonds. Bond A and Bond Care annual coupon bonds. Bond B is a zero-coupon hond. Bond Maturity (in years) Yield-to-Maturity (Annualized) Coupon Rate 6% 7% 107 93 0% 5% 100 105 102 100 All three bonds have a par value of 100 and will be redeemed at par. Calculate the number of units of Bond A that must be purchased to match the liabilities exactly (A) 1 3 2 0.8807 0.8901 0.8975 0.9524 0.9724 88 br bo as conly 1 bond Step by Step Solution
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