The following $1000 face value bonds are available for purchase: A 5-year, 8% annual coupons A 3-year, 10% annual coupons A 2-year, 5% annual coupons . A company has the following outstanding liabilities: . $24,840 at time 5 $18,340 at time 3 $23,290 at time 2 $X at time 1 O A company decides to use a dedication strategy to match their assets and liabilities. A combination of cash flows from the above bonds is enough to exactly match the liabilities at every time, including time 1. Calculate X, the amount of the liabilities at time 1. a) 1500 b) 4290 O c) 1110 d) 3340 e) 1840 Question 6 (1 point) A special investment pays $400 at time 5 and $700 at time 10. The 5- and 10-year spot rates are 6% and 9% respectively. Calculate the equivalent interest rate structure for this investment. a) 8.0% b) 7.5% c) 7.0% d) 6.5% e) 8.5% Question 7 (1 point) Forward rates have the following structure: 1+ fi = eot Calculate the 10-year spot rate, S10 a) e4.58 1 b) e48 1 c) e68 1 d) 5.58 1 e) 58 1