Question: ( 1 0 pts ) You will be paying $ 3 5 , 0 0 0 tuition a year at the end of the next

(10 pts) You will be paying $35,000 tuition a year at the end of the next 4 years. Bonds currently yield 5%.
2.A What are the present value and duration of your obligation?
2.B What maturity zero-coupon bond would immunize your obligation?
C Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 6%. What happens to your net position? That is, what happens to the difference between the value of the bond and that of your tuition obligation?
2.D Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately decrease to 4%. What happens to your net position? That is, what happens to the difference between the value of the bond and that of your tuition obligation?
(10 pts) You will be paying $35,000 tuition a year at

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