The Company S sold two containers of latex gloves to the company M, located in North Carolina. The company M failed to make the payment of $104,000 and was thus sued by the company S in the Illinois court. The judgment came against the company M. Then, an argument was put forth by the company M that it does not have minimum contact with the state of Illinois because North Carolina is its principal place of business and it is incorporated under its law. So, the judgment of the Illinois on the basis of personal jurisdiction is invalid. To Explain: The argument of the company M was sufficient to prevent the judgment of Illinois.

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.

Answer 1

Question

Chapter 2, Problem 5BCP

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Case Summary: The Company S sold two containers of latex gloves to the company M, located in North Carolina. The company M failed to make the payment of $104,000 and was thus sued by the company S in the Illinois court. The judgment came against the company M. Then, an argument was put forth by the company M that it does not have minimum contact with the state of Illinois because North Carolina is its principal place of business and it is incorporated under its law. So, the judgment of the Illinois on the basis of personal jurisdiction is invalid.

To Explain: The argument of the company M was sufficient to prevent the judgment of Illinois.

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