3 ) XYZ company has to pay its customers S 2 0 0 0 after 2 years...
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Question:
XYZ company has to pay its customers S after years and $ after years.
In order to fund these payments, the company will buy one year and five year zero coupon bonds. The current market interest rate is
The company wants to immunize itself from potential interest rate risk Redington Immunization
Find the price of each bond and check that the Redington Immunization conditions are met.
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