A company has liabilities of $2,000 and $5,000 due at the end of years 1 and...

A company has liabilities of $2,000 and $5,000 due at the end of years 1 and 3 respectively. The company can purchase a 1-year $1,000 par value zero-coupon bond with an annual effective yield of 5.6% and a 3-year $1000 par value zero-coupon bond. If the cost of exactly matching the liabilities is $6,068.36, what is the effective yield on the 3-year bond?

Show all works, and please show ur work it with math steps and illustrations instead of excel tables!! Thank you! I will thumb up if it's correct!

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jeff jeffy answered 1 year ago

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