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Accounting

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Alice owes Bob $2200 at the end of one year and is required to set up an investment fund to meet this obligation. Alice must immediately invest (1) an amount x in a money market fund earning 10% currently with rates changing daily, and (2) an amount y in a two-year zero-coupon bond earning 10% to immunize her obligations. Assume the effective interest rate is 10% in all calculations. Determine x and y. Calculate the modified duration of the two assets. Find the present value of payments of $1000 at the end of each year for tive years if the spot rates for 1 to 5 years are 7.00%,8.00%,8.75%,9.25% and 9.50%, respectively. What level yield rate would produce an equivalent value

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