GameOn Credit Union has to pay $1,000 after 2 years and $2,000 after 4 years. The current market interest rate is 10%, and the yield curve is assumed to be flat at any time. The institution wishes to immunize the interest rate risk by purchasing zero- coupon bonds which mature after 1, 3 and 5 years. One member in the risk management team of the institution, Alaina, devised the following strategy:

Purchase a 1-year zero-coupon bond with a face value of $44.74, Purchase a 3-year zero-coupon bond with a face value of $2,450.83, Purchase a 5-year zero-coupon bond with a face value of $500.00.

Q.Find the present value of the liability and asset. And Does Alainas portfolio satisfies the conditions of the Redington immunization strategy. please explain.