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Q17 Q17 10 Points Suppose that the following investment options are available: A: a zero-coupon bond, redeemable in 7 years for its purchase price, $870.
Q17 Q17 10 Points Suppose that the following investment options are available: A: a zero-coupon bond, redeemable in 7 years for its purchase price, $870. B: a payment of $250 in 1 year, $450 in 3 years, and $800 in 10 years. C: a 12-year bond with monthly coupons, a duration of 9 years, and purchase price of $1300. Supposing an underlying interest rate across all options of i = 8%, and calculate the modified duration of my portfolio given that I invested once in each of these options
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