Two people M and L, contracted with the company IO to renovate their kitchen. The delivery of some new cabinets was defective. The persons M and L asked for the replacement of the defective cabinets but before the arrival of new cabinets, the association between the two broke down. The persons M and L suggested the company IO to clear out the cabinets and return the payment with installation fee. The company IO denied and emphasized to fulfill the contract. To find: Applicability of the buyer’s right to revoke the acceptance.

Question

An insurance company has liabilities of £7 million due in 10 years' time and £9 million due in 17 years' time. The assets of the company consist of two zero-coupon bonds, one paying £X million in 7 years' time and the other paying £Y million in 20 years' time. The current interest rate is 6% per annum effective. Find the nominal value of X (i.e. the amount, IN MILLIONS, that bond X pays in 7 year's time) such that the first two conditions for Redington's theory of immunisation are satisfied. Express your answer to THREE DECIMAL PLACES.

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Question

Chapter 14, Problem 8BCP

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Case summary: Two people M and L, contracted with the company IO to renovate their kitchen. The delivery of some new cabinets was defective. The persons M and L asked for the replacement of the defective cabinets but before the arrival of new cabinets, the association between the two broke down. The persons M and L suggested the company IO to clear out the cabinets and return the payment with installation fee. The company IO denied and emphasized to fulfill the contract.

To find: Applicability of the buyer’s right to revoke the acceptance.

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