Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help me to solve by using M.Excel and show the formula as well. thank you in advanced! Alana Insurance Sdn Bhd is obligated to pay

image text in transcribed

help me to solve by using M.Excel and show the formula as well. thank you in advanced!

Alana Insurance Sdn Bhd is obligated to pay 10 annual claims on a policy at the end of every year. The first payment is RM250,000 and each payment thereafter is to be adjusted for inflation of 2% annually compounded). a) If the company wishes to match their liabilities and assets using absolute matching strategy with zero coupon bond. Given below yield curve, determine the total cost to implement this strategy. (Hint: calculate set of spot rates first] de = 0.05 +0.007 -0.000462 for 0 st 10 (15 Marks) b) Rework (a) using coupon bonds with annual coupons. Assume that the coupon bonds all have the same yield rate as the zero coupon bond above and that all sell at par. (15 marles Alana Insurance Sdn Bhd is obligated to pay 10 annual claims on a policy at the end of every year. The first payment is RM250,000 and each payment thereafter is to be adjusted for inflation of 2% annually compounded). a) If the company wishes to match their liabilities and assets using absolute matching strategy with zero coupon bond. Given below yield curve, determine the total cost to implement this strategy. (Hint: calculate set of spot rates first] de = 0.05 +0.007 -0.000462 for 0 st 10 (15 Marks) b) Rework (a) using coupon bonds with annual coupons. Assume that the coupon bonds all have the same yield rate as the zero coupon bond above and that all sell at par. (15 marles

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions