USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 73

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Consider two bonds: both pay annual interest. Bond Y has a coupon of 6 percent per year, maturity of five years, yield to maturity of 6 percent per year, and a face value of $1000. Bond X has a coupon of 7 percent per year, maturity of 10 years, yield to maturity of 4 percent per year, and a face value of $1000.
-Refer to Exhibit 13.13. Assume that your investment horizon is five years and your portfolio consists only of Bond Y and Bond X. Indicate the proportions invested in each bond, so that the portfolio is immunized.

• A) 50 percent in Bond Y and 50 percent in Bond X
• B) 76 percent in Bond Y and 24 percent in Bond X
• C) 36 percent in Bond Y and 64 percent in Bond X
• D) 100 percent in Bond X
• E) 100 percent in Bond Y

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Definitions:

Pintle Hook Assembly

A type of towing hitch system that uses a pintle hook and lunette ring, commonly used for heavy or military trailers.

Trailer Bump

A phenomenon or physical feature on a trailer designed to absorb impact or facilitate smooth towing operations.

Ball Hitches

Ball hitches are a type of towing hitch that uses a ball-shaped connector to attach a trailer to a vehicle, providing a pivot point that allows for some movement between the trailer and the vehicle during towing.