How can the interest-rate risk of the projected liabilities of a defined benefit pension plan be measured?
Answer to relevant QuestionsHow does a defined benefit pension plan differfrom a defined contribution plan? Answer the below questions. (a) Why is the interest-rate sensitivity of adefined benefit pension plan’s assets and liabilities important? (b) In 1986, Martin Leibowitz wrote a paper titled“ Total Portfolio Duration: A ...Suppose that the active return for a portfolio over the past year was 130 basis points after management fees. What questions would you have to before concluding that the manager’s performance was exceptional? If the average quarterly return for a portfolio is 1.23%, what is the annualized return? Explain why the implied repo rate is important in determining the cheapest-to-deliver issue.
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