What maturity zero-coupon bond would immunize your obligation


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The Garraty company has two bond issues outstanding. Bond L has a maturity of 15 years and Bond S a maturity of 1 year.

You will be paying $10,300 a year in tuition expenses at the end of the next two years. Bonds...

What will be the value of each of these bonds. You own a corporate bond that carries a 5. The current market yield on the bond is 6. Coupon interest is paid semiannually and the market price is.

Assuming the coupons are paid semi-annually and the principal amount is equal to , what is the Macaulay duration of the bond in years? What is the duration if the yield to maturity is More Similar Questions. I found the duration, but am having trouble finding asked by Danielle on April 10, Finance 2. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Immunization

Answer pv 2 b what. What maturity zero-coupon bond would immunize your obligation? Investing in zero coupon bonds with a 1.

What it is:

Suppose you buy a zero-coupon bond with value and duration equal to your answers in part a and b. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation?

Show all your workings. Charlene has a son who is planning to attend UoA in three years.

What is the minimum amount Charlene needs to save today in order to meet the costs without making additional contributions in the future?

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