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Business, 30.03.2020 22:45 4Myboyz1234

You will be paying $10,000 a year in tuition expenses at the end of the next 2 years. Bonds currently yield 8%. a. What is the present value and duration of your obligation? b. What maturity zero-coupon bond would immunize your obligation? c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 9%.

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You will be paying $10,000 a year in tuition expenses at the end of the next 2 years. Bonds currentl...
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