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Liability payments consist of$2,200 at the end of 1 year,$3,300 at the end of 2 years and$4,500 at the end of 3 years. An attempt
Liability payments consist of$2,200 at the end of 1 year,$3,300 at the end of 2 years and$4,500 at the end of 3 years. An attempt is made at interest ratei0= 9% to arrange assets so as to match liabilities with an asset cashflow ofC0at time 0 and an asset cashflow ofCnat timen. For the following values ofndetermine the corresponding asset cashflows and whether or not the assets immunize the liabilities:
(a) n=2 (b) n=4
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