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Use the following information for Q29 to Q31 Suppose Huron Corp. must make a $50 million pension payment every year for the next 5 years.
Use the following information for Q29 to Q31 Suppose Huron Corp. must make a $50 million pension payment every year for the next 5 years. Huron decides to immunize the payment with investments in 2 year and 5 year zeros. The interest rate is 4%. oooh time of Bond. 30. Now suppose Dominion's intrinsic value is $21.00 today, what must be its growth rate! (based on information above) A. 0.0% B. 10% C. 4% D. 6% E. 7% 20. Which of the following are false about the interest-rate sensitivity of bond 1) Bond prices and yields are inversely related. II) Prices of long-term bonds tend to be more sensitive to Tong-term bonds tend to be more sensitive to interest-rate changes than prices o short-term bonds. 1) interest-rate risk is directly related to the bond's coupon rate. The sensitivity of a bond's price to a change in its yield to maturity price to a change in its yield to maturity is inversely related to the yield to maturity at which the bond is currently selling. A. I, II, and IV B. I, II, III, and IV C. II, III, and IV D. III E
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