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Mathematics, 05.05.2020 17:23 austinbeesley9855

Suppose a company must pay a liability of 1000 in 2 years. The company invests 620.16 in a one year zero coupon bond and 385.21 in a 4 year zero coupon bond. The effective rate of interest is io = 7.5%. (Equalities in a) and b) may differ due to the rounding of 620.16 and 385.21.) a) Then PA(io) = 620.16v + 385.21v 1000v² = PL(io). Find PA(io) = PL(io).

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Suppose a company must pay a liability of 1000 in 2 years. The company invests 620.16 in a one year...
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