Does the solution change— that is, should James purchase any of bond 4?
In the pension fund model (Example 4.3 of the lectures), suppose there is a fourth bond, bond 4. Its unit cost in year 1 is $1020, it returns coupons of $70 in years 2 to 5 and a payment of $1070 in year 6. Modify the model to incorporate this extra bond and then run Solver. Does the solution change— that is, should James purchase any of bond 4?
