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You have liabilities consisting of four payments in the next 2 years as follows Period (in six-months) 1 2 3 4 Liability (in $100,000) 102

You have liabilities consisting of four payments in the next 2 years as follows

Period (in six-months) 1 2 3 4
Liability (in $100,000) 102 108 105 103

Suppose that you have $1,000 par value bonds with different maturities and coupon rates available. How would you build your portfolio to match the cash flows of liabilities? (Hint: List four bonds with different maturities and for each bond, provide the quantity and the coupon rate)

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