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please do 4b An insurance company must make payments to a customer of $10 million in one year and $4 million in five years. The
please do 4b
An insurance company must make payments to a customer of $10 million in one year and $4 million in five years. The yield curve is flat at 10% a. If it wants to fully fund and immunize its obligation to this customer with a single issue of a zero-coupon bond, what maturity bond must it purchase? (Do not round intermediate calculations. Round your answer to 4 decimal places.) 3.34/10 points awarded Maturity of zero coupon coupon bond 1.8600 years Scored b. What must be the face value and market value of that zero-coupon bond? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Face value $ 11.57 X 1 million $ 13.82 million valueStep by Step Solution
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