Zero-coupon bond and how much in the perpetuity

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You need to create a portfolio with a duration of 4 years. You can use a 3 year zero-coupon bond and a perpetuity which pays $80 each and every year forever and has yield of 8%. How much of the portfolio value in percentage you would have to invest in the zero-coupon bond, and how much in the perpetuity?

Reference no: EM13952306

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