An insurance company has a single liability due in three years. The company fully immunizes its position by purchasing one-year and four- year zero-coupon bonds. The face value of the one-year bond is 20,000 and the face value of the four-year bond is 50,090. Assume that the yield curve is flat.

Calculate the amount of the liability?

Answer rating: 100% (QA)

Since the company fully immunizes its position the present value of ... View the full answer