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You are an investor who possesses a single liability one cash flow to be paid in 9 years. To fund these liabilities, you have purchased

You are an investor who possesses a single liability one cash flow to be paid in 9 years. To fund these liabilities, you have purchased a bond with a duration of 7 years. Suppose there existed another security with a duration of 10 years. What percentage of your portfolio should you invest in the current bond (the one with duration equal to 7 years) and what percentage should you invest in the security with the 10 year duration?

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