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Suppose that your insurance company has issued a Guaranteed Investment Contract (GIC) that matures in three years and promises to pay an interest rate of

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Suppose that your insurance company has issued a Guaranteed Investment Contract (GIC) that matures in three years and promises to pay an interest rate of 23.36%. The amount invested in the GIC today is $150,000. You have decided to immunize your position by purchasing a bond that has a par value of $150,000, a coupon rate of 23.36%, and four years to maturity. The bond is currently selling at par value. 3a) What is the future value of your company's obligation? $185,040.00 $281,588.13 $347,367.12 3b) Assume that interest rates stay at 23.36%. How close will you come to meeting your obligation? I will be $13,599 short I will be able to repay my obligation in full I will have $13,599 more than what I need to repay my obligation

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