. A company has the followiny liabilities: annuity payments of 200,000 per annum to be paid annually in arrear for the next 20 years a lump sum of 300,000 to be paid in 15 years. The company wishes to invest in two fixed-interest securities in order to immunise its liabilities. Security A has a coupon rate of 9% per annum and a term to redemption of 12 years. Security B has a coupon rate of 4% per annum and a term to redemption of 30 years. Both securities are redeemable at par and pay coupons annually in arrear. The rate of interest is 8% per annum effective. Calculate the present value of the liabilities. (3) (1) Calculate the discounted mean term of the liabilities. (1) Calculate the nominal amount of each security that should be purchased so that Redington's first two conditions for immunisation against small changes in the rate of interest are satisfied for this company (8] (iv) Describe the further calculations that will be necessary to determine whether the company is immunised against small changes in the rate of interest [2] Total 177