Question A company has liabilities of $500, S850, S1000, and $2550 due at the end of years 1, 2, 3, and 4 respectively. The only investments available are the following bonds, all redeemable at par: 1-year 9% annual coupon bond 2-year 4% annual coupon bond 3-year 3% annual coupon bond 4-year 6% annual coupon bond Given an effective rate of interest of 5%, how much should the company invest in the 2-year bond in order to exactly match the assets and liabilities. Possible Answers 593.71 B 617.45 642.40 D 654.56 E 669.20 Question A company has liabilities of $500, S850, S1000, and $2550 due at the end of years 1, 2, 3, and 4 respectively. The only investments available are the following bonds, all redeemable at par: 1-year 9% annual coupon bond 2-year 4% annual coupon bond 3-year 3% annual coupon bond 4-year 6% annual coupon bond Given an effective rate of interest of 5%, how much should the company invest in the 2-year bond in order to exactly match the assets and liabilities. Possible Answers 593.71 B 617.45 642.40 D 654.56 E 669.20