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Question A company must pay liabilities of 1,000 and 2,000 at the end of years 1 and 2 respectively. The only investments available to the

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Question A company must pay liabilities of 1,000 and 2,000 at the end of years 1 and 2 respectively. The only investments available to the company are the following two zero-coupon bonds: Maturity (Years) Effective Annual Yield Par 1 10% 1,000 2 12% 1,000 Determine the cost to the company today to match its liabilities exactly. Possible Answers A 2,007 B 2,487 c 2,503 D 2,562 E 3,001

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