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Changing market interest rate

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Reference no: EM133061959

Considering an immunisation strategy in bond investment. Use a 5%, 3-year life treasury bond, semi-annual payment, 100 par value, currently yielding at 3% as an example, to show how it can be immunised from a change in interest rate from 3% to 3.2% immediately after you purchase it today. You need to calculate holding period return (HPR) P.A.. by changing market interest rate and show the process of achieving immunisation.

Reference no: EM133061959

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