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Short-sell to hedge your interest rate risk

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Reference no: EM132558584

If you had $1 million invested in the 3-year 5% coupon bond, how many of the 4-year zero- coupon bonds would you need to short-sell to hedge your interest rate risk?

NOTE: The zero coupon bond is priced at $82.70 with a face value of $100

The YTM is 5%

Reference no: EM132558584

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