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Prosperity Insurance sells a two-year annuity with equal payments at the end of each year. The price of this annuity is 9,297 . Prosperity Insurance
Prosperity Insurance sells a two-year annuity with equal payments at the end of each year. The price of this annuity is 9,297 . Prosperity Insurance creates a portfolio made up of a one-year zero-coupon bond and a two-year zero-coupon bond to immunize this annuity. The company uses an annual effective interest rate of 5% to value its assets and liabilities. Calculate the amount invested today in the two-year zero-coupon bond
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