Find the cost of exactly matching those liabilities

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Reference no: EM132007680

A company must pay liabilities of 3000 and 5000 at the end of years 2 and 4, respectively. The only investments available to the company are the following zero-coupon bonds: 2 year term with an annual effective rate of 5.5% and 4 year term with annual effective rate of 6.8%. Find the cost of exactly matching those liabilities.

Reference no: EM132007680

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