Question: A zero coupon bond A 5% coupon bond An 8% coupon bond 10. Suppose you are Investing money in an RESP (Registered Educational Savings Plan)

A zero coupon bond A 5% coupon bond An 8% coupon bond

10. Suppose you are Investing money in an RESP (Registered Educational Savings Plan) to meet your childs post-secondary schooling expenses. You expect you will have to pay out $20,000 per year for 4 years starting 9 years from now. We will just consider the first years obligation of $2,000. You have available the three bonds described in Question 2 above. a. Calculate the current price and duration of each bond. b. Calculate the shares of Bonds 1 and 3 in an optimal immunized portfolio.

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