Question: Please finish the immunization table below. This investor is trying to lock in an interest rate of return of 8% for an investment horizon of
Please finish the immunization table below. This investor is trying to lock in an interest rate of return of 8% for an investment horizon of 5 years using a corporate bond with 8% annual coupon, selling at a par value of $1000 with six years to maturity, and a duration close to 5 years. Assumes market interest rates decrease from 8% to 7% at the end of the third year.
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