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Two corporate bonds are not callable, both have the FV = $1,000, paying coupon per 180 days (360 days a year). Bond A has c
Two corporate bonds are not callable, both have the FV = $1,000, paying coupon per 180 days (360 days a year).
Bond A has c = 3%, maturity = 10.5 years, YTM = 3%.
Bond B has c = 5%, maturity = 2 years, YTM = 2%.
Using $1,000,000 to create a portfolio with A & B. If the portfolio contains 20% of bond A and 80% of bond B, calculate the number of bond A and bond B.
Please show you workings.
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