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What face amount of each bond should the company buy

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Question - A company must make payments of $10 annually in the form of a 10-year annuity immediate. It plans to buy two zero coupon bonds to fund these payments. The first bond matures in 2 years and the second bond matures in 9 years, and both are purchased to yield 10% effective. What face amount of each bond should the company buy in order to be immunized from small changes in the interest rate? Could you help me with this question with full steps and not by BA calculator?

Reference no: EM132598754

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