MJ & Brothers Plc is required to make a $10 million payment in 2 years and a $6 million payment in 4 years. MJ & Brothers Plc wants to make a portfolio with bonds E and F to fund the future payments. The information on bonds E and F are in the table below. The yield curve is flat at 8% p.a. How much of each bond should the portfolio contain for the firm to be able to bear the cost of the payments even after a shift in the interest rate curve?

Answer rating: 100% (QA)

The company should invest 966655464 in bond E and 507870000 in bond F t... View the full answer