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please show calculations (5 points) Sydney has a liability that consists of a payment of L in one year and a gol payment of 4L
please show calculations
(5 points) Sydney has a liability that consists of a payment of L in one year and a gol payment of 4L in two years. To create a dedicated (absolutely-matched) portfolio, she purchases exactly one of each of the following assets: A one-year annual coupon paying bond, redeemable at par, with face amount 1000 and coupon rate r. A two-year annual coupon paying bond, redeemable at par, with face amount 5000 and coupon rate 1.25r. Calculate r and LStep by Step Solution
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