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You manage a pension fund that will provide retired workers with IIfetime annulties. You determine that the payouts of the fund are going to closely

image text in transcribed You manage a pension fund that will provide retired workers with IIfetime annulties. You determine that the payouts of the fund are going to closely resemble level perpetuitles of $1.4 million per year. The interest rate is 10%. You plan to fully fund the obligation using 5 -year and 20 -year maturity zero-coupon bonds. Required: a. How much market value of each of the zeros will be necessary to fund the plan If you desire an Immunized position? (Do not round Intermedlate calculations. Enter your answers in millions. Round your answers to 1 declmal place.) b. What must be the face value of each of the two zeros to fund the plan? (Do not round Intermedlate calculatlons. Enter your answers In millions rounded to 2 decimal places.)

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