The insurance company collected $6,000,000 in insurance premiums against these liabilities. The insurance company is considering to
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Question:
The insurance company collected $6,000,000 in insurance premiums against these liabilities. The insurance company is considering to invest in 6-year zero coupons bond and a 10 years zero coupon bond where each has a $1000 face value. Determine the following in the empty cells.
Bond/Maturity | Interest rate | # of bonds to buy | Current Bond Value | Total $ investment | |||
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| 6 | 0.06 | 5000 | $704.96 |
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| 10 | 0.074 |
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| Total Investment |
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Expert Answer:
To determine the required values for the investment in zero coupon bonds we need to calculate the pr... View the full answer
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