Chapter 11, Problem 22PS

Summary Introduction

(a)

To determine:

The market value of each of the zeros will be necessary to fund the plan if you desire an immunized position.

Introduction:

Pension funds means a fund from which pensions are paid, contributed by employee or employer or both.

Zero coupon bond issues at a deep discount to its face value with no coupon interest.

Summary Introduction

(b)

To determine:

The market value of each of the zeros will be necessary to fund the plan if you desire an immunized position.

Introduction:

Pension funds means a fund from which pensions are paid, contributed by employee or employer or both.

Zero coupon bond issues at a deep discount to its face value with no coupon interest.