Purchase asset portfolio that exactly matches liabilities

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A company must pay liabilities of $19000 and $11000 at the end of years 1 and 2, respectively. The only investments available to the company are 1 and 2 year zero coupon bonds with yields 6% and 7%, respectively. Calculate the cost to the company today to purchase an asset portfolio that exactly matches the liabilities

Reference no: EM13763842

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