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Lability payments of 100 each are due to be paid in 2,4 and 6 years from now. Asset cashflow consists of A1 in 1 year
Lability payments of 100 each are due to be paid in 2,4 and 6 years from now. Asset cashflow consists of A1 in 1 year and A5 in 5 years. The yield for all payments is 10%. an attempt is made to have the asset cash flow immunize the liability cashflow by matching present value and duration. (1) Find A1 and A5. (2)Determine whether or not the conditions for Redington Immunization are satisfied
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