A pension plan is obligated to make disbursements of $4 million, $9 million, and $4 million...

A pension plan is obligated to make disbursements of $4 million, $9 million, and $4 million at the end of each of the next three years, respectively. The interest rate is 18% annually. If the plan wants to fully fund and immunize its position, how much of its portfolio should it allocate to one-year zero-coupon bonds and perpetuities, respectively, if these are the only two assets funding the plan? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Investment in one-year zero-coupon bonds ___%

Investment in perpetuity ___%

SOMEONE PLEASE HELP ASAP!!

Expert Solution

jeff jeffy answered 1 year ago

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