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What are the proper proportions of the two bonds above needed to properly immunize the bond portfolio, expressed as proportions of FACE (not PRICE) of
What are the proper proportions of the two bonds above needed to properly immunize the bond portfolio, expressed as proportions of FACE (not PRICE) of the Bonds? Assume a fixed payment needs to be made in 4 years for $20,000 BONDA FACE COUPON MATURITY 9% Annual 6 years 11% YIELD Per year BOND B FACE COUPON MATURITY YIELD 12% Semi-annual 4 years 11% Per Year What are the proper proportions of the two bonds above needed to properly immunize the bond portfolio, expressed as proportions of FACE (not PRICE) of the Bonds? (This problem may be solved using Excel Goal Seek, which may return slightly different answers each time it is used; choose the values closest to what you found) about 41% of Bond A, 59% of Bond B about 49% of the Bond A, 51% of Bond B about 56% of Bond A, 44% of Bond B about 66% of Bond A, 34% of Bond B
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