Question: PLEASE HELP ASAP You received a 3-year loan. The loan must be repaid in three equal annual instalments of 100 000 $ payable at the

PLEASE HELP ASAP

You received a 3-year loan. The loan must be repaid in three equal annual instalments of 100 000 $ payable at the end of each period. The loan interest rate is equal to 5.0% p.a. The 1-year coupon bond with coupon payable two times a year and coupon rate equal to 4.0% and 6-year zero-coupon bond are available on the capital market. The nominal value of bond is equal to 1 000 $. The YTM is equal to 5.0%. Build a portfolio immunization. Calculate:

  1. the loan present value and duration, (4 points)
  2. the bonds prices and duration, (8 points)
  3. the shares of bonds in the portfolio, (2 points)
  4. integer number of bonds in the portfolio. (6 points)

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