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Investor has to cover the following liabilities in the future: PLN 30,000 at the end of 1t year, PLN 20,000 at the end of 2nd year and PLN 15,000 at the end of 3rd year. How many bonds should investor purchase in order to create an optimal bonds portfolio that matches in full payments need to be mace in the future, if there are following bonds available on the market: 1-year bond with a nominal of PLN 500 and interest 10% pa. paid yearly, M 2-year zero coupon bond with a nominal of PLN 1,000, . 3-year bond with a nominal of PLN 800 and interest 12% pa. paid yearly, . 4-year bond with a nominal of PLN 1,000 and interest 1% pa. paid yearly. Please asşume that YTM is fixed in the investment period-and epuals e9a -500

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Answer #1

for calculating zero coupon bond we use YTM rate which is given in the question. YTM is also called as discount rate Page No. PLN 1000 7esceupen hond 3PLN 80o 1921 ? 4 PLN 1000 3001-9 Wroking Note lapon hond triパ 2 amouus egt boud 3,701.1Yo PIN 30 O00 20,000 2 01000 2 3323 896 3 Total value 70/ 002.

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