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A company owes $20,000 and $50,000 to be paid at the end of year 4 and year 7, respectively. The company will employ the techniques
A company owes $20,000 and $50,000 to be paid at the end of year 4 and year 7, respectively. The company will employ the techniques of matching the duration and the present value of the above obligation To implement these techniques, the company wants to produce asset cash flows with the amount $X, $30,000, and $Y in year 1,5, and 10 respectively. The annual effective interest rate of 8% is applied with both liabilities and assets. Calculate the amount of X and Y. Do these techniques meet the condition of Redington immunization
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