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Securities A, B, and C have the following cash flows: (Ignore taxes) ABC Year 1 $ 50 130 20 Year 2 $ 50 20 Year

Securities A, B, and C have the following cash flows: (Ignore taxes)ABC  Year 1 $ 50 130 20 Year 2 $ 50 20 Year 3 $ 50 120 Calculate their durations if the interest rate is 8%. Note: Do not round intermediate calculations. RoundSuppose that you have an investment of $11 million in A. What combination of B and C would hedge thisNow suppose that you have a $11 million investment in B. How would you hedge? Note: Enter your numeric 

ABC Year 1 $ 50 130 20 Year 2 $ 50 20 Year 3 $ 50 120

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1 Calculations for the Macaulay and Modified Durations of securities A B and C with a given interest rate of 8 Security A Cash Flows 50 50 50 Present Value PV at 8 PV Year 1 50 1 008 4630 PV Year 2 50 ... blur-text-image

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