How much of the portfolio should you allocate to the


You are managing a pension fund whose liabilities have average duration of 16 years. You want to immunize the interest rate risk and are considering 4-year maturity zero-coupon bonds and 5.00% yield perpetuities. How much of the portfolio should you allocate to the zero-coupon bonds to immunize if there are no other assets funding the plan?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: How much of the portfolio should you allocate to the
Reference No:- TGS02667168

Expected delivery within 24 Hours