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You will be paying $12,000 a year in tuition expenses at the end of the next two years. All bonds currently yield 5%. a) What
You will be paying $12,000 a year in tuition expenses at the end of the next two years. All bonds currently yield 5%. a) What is the duration of your obligation? (5 pts) b) You want to fully fund and immunize this position by using 1-year and 6-year zero-coupon bonds. How much weight should you put in the 1-year vs 6-year zero-coupon bonds?
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