Question
Your firm owes $4,000,000 in 2 years, $6,000,000 in 4 years, and $8,000,000 in 6 years. Describe a dedicated cash flow matching strategy that would
Your firm owes $4,000,000 in 2 years, $6,000,000 in 4 years, and $8,000,000 in 6 years. Describe a dedicated cash flow matching strategy that would fully fund and immunize the obligation. What will be the duration of the portfolio of assets used if the current yield curve has a 2year spot rate of 5%, a 4year spot rate of 6%, and a 6year spot rate of 7%?
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HBR Guide To Finance Basics For Managers
Authors: Harvard Business Review
1st Edition
1422187306, 978-1422187302
