Using a one-year zero-coupon bond and perpetuity

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You will be paying $5,000 a year in tuition expenses at the end of the next 3 years. Bonds currently yield 30%. and if you plant to fund your obligation using a one-year zero-coupon bond and a perpetuity, how much of each of these bonds (in market value) will you want to hold to both fully fund and immunize your obligation?

Reference no: EM131343342

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Using a one-year zero-coupon bond and perpetuity : You will be paying $5,000 a year in tuition expenses at the end of the next 3 years. Bonds currently yield 30%. and if you plant to fund your obligation using a one-year zero-coupon bond and a perpetuity, how much of each of these bonds (in market va..

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