|
|
|
|
|
|
|
|
| Chapter 15 - Immunization |
| 236 |
Time Line
The correct Price on the TI 8% Bond is $950.26
Thus
| [$1,000,000] |
= 869.7 => | 870 bonds |
| [ (1.10)2 ] |
| ----------------- |
| $950.26 |
| |
870 * $950.26 = $826,726.20 |
: At t=0 purchase $870,000 in TI 8% three year bonds for a total of $826,726.20
|
| 238 |
Table 15-3:
The correct Price on the TI 8% Bond is $950.26
|
| 238 |
| 0.4382 * $826,446.28 |
= 372.3 => 372 7% HR bonds |
| $972.73 |
| |
| 0.5618 * $826,446.28 |
= 488.6 => 489 8% TI bonds |
| $950.26 |
|
|
|
|
|
|
|
