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 p
resent 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%.
1 answer:
You might be interested in