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An insurance company must make payments to a customer of $8 million in 1 year and $5 million in 5 years. The yield curve is

An insurance company must make payments to a customer of $8 million in 1 year and $5 million in 5 years. The yield curve is flat at 10% per annum. The insurance company wants to fully fund and immunize its obligation to this customer by purchasing a zero-coupon bond.

What must be the face value of the zero-coupon bond that the insurance company should invest in?

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