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Problem 55.4 A $5,000 payment is owed from Abby to Ben two years from now. Abby wants to sct up an investment fund to mcct
Problem 55.4 A $5,000 payment is owed from Abby to Ben two years from now. Abby wants to sct up an investment fund to mcct this obligation, but the only 8%, but the rate changes daily), and a five-year zero-coupon bond earning 8%. Use an immunization framework to determine the amount of money Abby should invest now in cach of the two investment vchicles. Assume ar effective annual interest rate of 8% for present value calculations. Problem 55.4 A $5,000 payment is owed from Abby to Ben two years from now. Abby wants to sct up an investment fund to mcct this obligation, but the only 8%, but the rate changes daily), and a five-year zero-coupon bond earning 8%. Use an immunization framework to determine the amount of money Abby should invest now in cach of the two investment vchicles. Assume ar effective annual interest rate of 8% for present value calculations
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