How many of each bond should bondi super buy

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Bondi Super plans to invest $100 million in a portfolio with a duration of 5 years using two default-free zero-coupon bonds, X and Y. Bond X matures 2 years and six months from today, while Bond Y matures 10 years from today. All bonds have a par value of $1,000,000 and are currently priced to yield 5% pa.

a) How many of each bond should Bondi Super buy? Show your calculations

Reference no: EM132554729

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