Suppose that the duration of ABCs U.S. pension liability is estimated at 8 years. ABC

wants its bond investments in the pension fund to hedge all of the PBO's exposure

to the discount rate. If the PBO is $2.5 billion, the fair value of pension assets are

$2.4 billion, and the fund is 90% in bonds and 10% in stocks, what duration of bonds

need to be purchased?

10.27 years

9.89 years

10.51 years

9.69 years

9.26 years

10.84 years