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What is the macaulay duration of the net equity

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Question: 1. A large finance company has assets of 12 bil and liabilities of 9 bil. The Macaulay duration of the assets are 6.5 years. The Macaulay duration of the liabilities is 6 years.

a. What is the Macaulay duration of the net equity?

b. The company would like to immunize its net equity position by restructuring 2 billion of its liabilities. What is the required duration of the two billion dollar portion of the liabilities in order to immunize its net equity position?

Reference no: EM132761626

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