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Actuarial FM question: A company owes $500 and $1,000 to be paid at the end of year one and year four, respectively. The company will
Actuarial FM question:
A company owes $500 and $1,000 to be paid at the end of year one and year four, respectively. The company will set up an investment program to match the duration and the present value of the above obligation using an annual effective interest rate of 10%. The investment program produces asset cash flows of X today and Y in three years. Find X and determine whether the investment program satisfies the conditions for Redington immunization.
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