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Please show how to get the answer. 2. An insurance company has accepted an obligation to pay $10,000 at the end of 3 years. The
Please show how to get the answer.
2. An insurance company has accepted an obligation to pay $10,000 at the end of 3 years. The insurance company immunizes its portfolio by purchasing the following two bonds . 2-year, zero-coupon bond with a face value of $1000 . 5-year bond with annual coupons of 10% and a face value of $1000 The yield curve is level at 10%. The number of 5-year bonds purchased is X. Determine X. X 3.46Step by Step Solution
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