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explain the answer Question 7 Which of the following is an expression for the present value of an annuity-due with 20 beginning of year payments
explain the answer
Question 7 Which of the following is an expression for the present value of an annuity-due with 20 beginning of year payments under the yield curve method with an interest rate of 5% for the first 5 years and 6% for the last 15 years? a) \"$595+ 5|\"15Te% 5 _ c) 5%+ gamma d) a5|5% + 1115-5 "13695 Question 8 Which of the following describes Absolute Matching? a) Structuring the assets such that two cash inflows are associated with each cash outow so any change in the interest rate results in a surplus of assets b) Structuring the assets such that the cash inow will exactly match the cash outow in every peod c) Structuring the assets such that duration ofthe assets matches the duration ofthe liabilities and the convexity of the assets is greater than the convexity of the liabilities Question 9 Which of the following is not an equation for the price of a bond? a) P=Fram+K b) P=C+C(gi)a-a c) P=Fram+C d)13'=G+(CG)1:1Step by Step Solution
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