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You have two payment to make. The first payment to be made in 4 years is 13 604,89. The second should be made in 10
You have two payment to make. The first payment to be made in 4 years is 13 604,89. The second should be made in 10 years and its present value is 15 000. You can invest in 3 year zero coupon bonds or perpetuities with 8% yield. What are the weights of the bonds in the portfolio that would allow to immunize the liabilities?
Explain each calculation that you make!
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