Question 20 A pension fund has an average duration of its liabilities equal to 15 years. The fund is looking at 8- year maturity zero-coupon bonds and a perpetual bond with yield to maturity of 4% to immunize its interest rate risk. How much of its portfolio should it allocate to the zero-coupon bonds to immunize if there are no other assets funding the plan? O 61 percent O47 percent O 39 percent O 53 percent

Question 22: A 10-year corporate bond has coupon rate equal to 5.5%. This bond has a par value equal to 100, pays annual coupons on November 17, and matures on November 17, 2033. Because of the credit risk associated with the payments of this bond, the market is discounting its cash flows using yields that are 3 percentage points higher than the yields required from credit- risk-free government bonds. As a result, this corporate bond has a yield to maturity equal to 6.711%. A. What is the price of the 10-year corporate bond? B. Using the first-order linear approximation, what would be the percentage change in the price of this 10-year corporate bond if its yield to maturity decreases by 0.5 percentage points?

Q 20 Calculate the price of a 5.7 percent coupon bond with 22 years left to maturity and a market interest rate of 6.5 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.) BOND PRICE_______   Is this a discount or premium bond?multiple choice premium bond discount bond

You are a risk analyst in a public pension fund. You have been asked to calculate the appropriate amount of futures to hedge the bond below. What is your calculation?