3.You are managing a portfolio of $1 million. Your target duration is 10 years, and you can...

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3.You are managing a portfolio of $1 million. Your target duration is 10 years, and you can invest in two bonds, a zero-coupon bond with maturity of five years and a perpetuity, each currently yielding 5%.

a. What weight of each bond will you hold to immunize your portfolio? (Round your answers to 2 decimal places.)

b How will these weights change next year if target duration is now nine years? (Round your answers to 2 decimal places.

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ISBN: 9780073530703

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Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Posted Date: May 18, 2024 03:00 AM

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3.You are managing a portfolio of $1 million. Your target duration is 10 years, and you can...

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