Kindly provide answers to the following questions

An insurance company has liabilities of f10 million due in 10 years time and $20 million due in 15 years time, and assets consisting of two zero-coupon bonds, one paying $7.404 million in 2 years time and the other paying $31.834 million in 25 years time. The current interest rate is 7% per annum effective. (i) Show that Redington's first two conditions for immunisation against small changes in the rate of interest are satisfied for this insurance company. [5] (ii) Determine the profit or loss, expressed as a present value, that the insurance company will make if the interest rate increases immediately to 7.5% per annum effective. [2] (iii Explain how you might have anticipated, before making the calculation in (ii), whether the result would be a profit or loss. [2] [Total 9]