Find the cost of exactly matching the liabilities

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Reference no: EM131047221

A company must pay liabilities of 3,000 and 5,000 at the end of years 2 and 4. The available investments are a 2-year maturity, 1000 Par zero-coupon bond with an effective annual yield of 5.5%, and a 4-year 100 Par zero coupon bond yielding 6.8%. Find the cost of exactly matching the liabilities.

Reference no: EM131047221

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