Question: In the pension fund problem suppose there is a fourth
In the pension fund problem, suppose there is a fourth bond, bond 4. Its unit cost in 2010 is $1020; it returns coupons of $70 in years 2011 through 2016 and a payment of $1070 in 2017. Modify the model to incorporate this extra bond, and re-optimize. Does the solution change—that is, should James purchase any of bond 4?
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