Question: Find A_1 and A_5 (2) Determine whether or not the conditions for Redington immunization are satisfied. Lability payments of 100 each are due to be

Lability payments of 100 each are due to be paid in 2,

Find A_1 and A_5

(2) Determine whether or not the conditions for Redington immunization are satisfied.

Lability payments of 100 each are due to be paid in 2, 4 and 6 years from now. Asset cashflow consists of A in 1 year and A5 in 5 years. The yield for all pay- ments is 10%. an attempt is made to have the asset cash flow immunize the liability cashflow by matching present value and duration.

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Present value of liabilities 100 11021001104100 1106 207393 Duration of liabilities 2100 11024100110 ... View full answer

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