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Suppose liabilities of $1, 000 are due to be paid at the end of years 2, 3, and 7. Asset cashflows consist A_1 in 1
Suppose liabilities of $1, 000 are due to be paid at the end of years 2, 3, and 7. Asset cashflows consist A_1 in 1 year and A_6 in 6 years. The yield for all payments is 5%. You are going to try and immunize the liability by meeting the conditions for immunization. Find A_1 and A_6. Verify that the conditions for immunization are met. Suppose liabilities of $1, 000 are due to be paid at the end of years 2, 3, and 7. Asset cashflows consist A_1 in 1 year and A_6 in 6 years. The yield for all payments is 5%. You are going to try and immunize the liability by meeting the conditions for immunization. Find A_1 and A_6. Verify that the conditions for immunization are met
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