Pension funds pay lifetime annuities to recipients. if a firm remains in business indefinitely, the pension obligation will resemble a perpetuity. suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $2.0 million per year to beneficiaries. the yield to maturity on all bonds is 16%. a. if the duration of 5-year maturity bonds with coupon rates of 12% (paid annually) is 4.0 years and the duration of 20-year maturity bonds with coupon rates of 5% (paid annually) is 8.2 years, how much of each of these coupon bonds (in market value) will you want to hold to both fully fund and immunize your obligation?
Answers: 1
Business, 21.06.2019 15:00
In its first year of operations, crane company recognized $31,700 in service revenue, $7,700 of which was on account and still outstanding at year-end. the remaining $24,000 was received in cash from customers. the company incurred operating expenses of $16,600. of these expenses, $12,690 were paid in cash; $3,910 was still owed on account at year-end. in addition, crane prepaid $3,260 for insurance coverage that would not be used until the second year of operations.
Answers: 3
Business, 21.06.2019 21:30
You invest all the money you earned during your summer sales job (a total of $45,000) into the stock of a company that produces fat and carb-free cheetos. the company stock is expected to earn a 14% annual return; however, 5 years later it is only worth $20,000. turns out there wasn't as much demand for fat and carb-free cheetos as you had hoped. what is the annual rate of return on your investment?
Answers: 1
Business, 22.06.2019 20:20
Which statement is not true about a peptide bond? which statement is not true about a peptide bond? the peptide bond has partial double-bond character. the carbonyl oxygen and the amide hydrogen are most often in a trans configuration with respect to one another. rotation is restricted about the peptide bond. the peptide bond is longer than the typical carbon-nitrogen bond.
Answers: 2
Pension funds pay lifetime annuities to recipients. if a firm remains in business indefinitely, the...
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