Business, 29.04.2021 18:20 xaguilar

A company has liabilities of 402.11 due at the end of each of the next three years. The company will invest 1000 today to fund these payouts. The only investments available are one-year and three-year zero-coupon bonds, and the yield curve is flat at a 10% annual effective rate. The company wishes to match the duration of its assets to the duration of its liabilities. Determine how much the company should invest in each bond.

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A company has liabilities of 402.11 due at the end of each of the next three years. The company will...

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