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You will be paying $11,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%. a. What is
You will be paying $11,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%. a. What is the present value and duration of your obligation? (Do not round Intermediate calculetlons. Round "Present value" to 2 decimal places and "Duration" to 4 declmal places.) Present value Duration years b. What maturity zero-coupon bond would immunize your obligation? (Do not round Intermediete calculatlons. Round "Duration" to 4 declmal places and "Face value" to 2 declmal places.) Duration Face value c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates Immedlately Increase to 10%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Do not round Intermediate calculatlons. Input the amount as a positive value. Round your answer to 2 decimal places.) Net position in value by d. what if rates fall immediately to 8%? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 declmal places.) Net position in value by
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