The insurance company INTAC must make a payment of $14,172.488 in 6 years. The market...
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The insurance company INTAC must make a payment of $14,172.488 in 6 years. The market interest rate is 10%. The companys portfolio manager wishes to fund the obligation using 8-year zero-coupon bonds and 5-year maturity bond with coupon rates of 8% (paid annually). How much of each of these coupon bonds (in market value) will the portfolio manager will hold to immunize the insurance companys obligation?
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