Question: Please answer type the question by using computer, so i can see it clearly, thank you!!! You must pay $100,000 and $150,000 respectively, at the
Please answer type the question by using computer, so i can see it clearly, thank you!!!
You must pay $100,000 and $150,000 respectively, at the end of next 2 years.
1(a) What will be the duration of your payment obligation, if the market interest rate is 6% per annum?
ii. Suppose you plan to fully fund the obligation using both 6-month zero coupon bonds and perpetuities. Determine how much of each of these bonds (in market value) you will hold in the portfolio.
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