Question
In: Finance
A life insurance company is known to "match" the maturity of assets such as bonds with...
A life insurance company is known to "match" the maturity of assets such as bonds with expected payout of policy benefits. True False
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Assets of Life Insurance Companies What are the main assets of life insurance companies? Identify the...
Assets of Life Insurance Companies What are the main assets of
life insurance companies? Identify the main categories. What is the
main use of funds by life insurance companies?
An insurance company purchases corporate bonds in the secondarymarket with six years to maturity. Total...
An insurance company purchases corporate bonds in the secondary
market with six years to maturity. Total par value is $55000000.
The coupon rate is 11%, with annual interest payments. If the
required rate of return is 1.7 percent, what will the market value
of the bonds be then? State the answer as a number with 2 decimals
without $ sign.
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual
interest payments, and is using duration as the measure of interest
rate risk.
What is the duration of each of the three bonds? (Do not round
intermediate calculations. Round your answers to 2 decimal places.
(e.g., 32.16))
a. $10,000 par value, coupon rate= 8.5%, rb=0.15. ___ years
b. $10,000 par value, coupon rate = 10.5%, rb=0.15 4.02
years
c. $10,000 par value, coupon rate...
An insurance company purchases corporate bonds in the secondary market with six years to maturity. Total...
An insurance company purchases corporate bonds in the secondary
market with six years to maturity. Total par value is $55 million.
The coupon rate is 11 percent, with annual interest payments. If
the expected required rate of return in 4 years is 9 percent, what
will the market value of each bond be then?
a. Less than $1,000
b. Between $1,000 and $1,100
c. Between $1,100.01 and $1,200
d. Greater than $1,200
The Aseri Insurance company purchases corporate bonds in the secondary market with 6 years to maturity....
The Aseri Insurance company purchases corporate bonds in the
secondary market with 6 years to maturity. Total par value is $55
million. The coupon rate is 10% with annual interest payments. If
the expected required rate of return in 4 years is 8%, what will
the market
value of the bonds be then;
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual interest payments, and is
using duration as the measure of interest rate risk. What is the
duration of each of the three bonds? a) $10,000 par value, coupon
rate = 10%, rb = 0.2 b) $10,000 par value, coupon rate = 12%, rb =
0.2 c) $10,000 par value, coupon rate = 12%, rb = 0.2
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual coupon payments, and
duration as the measure of interest rate risk. What is the duration
of each of the three bonds? (Do not round intermediate
calculations. Round your answers to 2 decimal places. (e.g.,
32.16)) Duration of the Bond a. $10,000 par value, coupon rate =
8.8%, rb = 0.18 years b. $10,000 par value, coupon rate = 10.8%, rb
= 0.18 c. $10,000...
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual coupon payments, and
duration as the measure of interest rate risk.
What is the duration of each of the three bonds? (Do not
round intermediate calculations. Round your answers to 2 decimal
places. (e.g., 32.16))
Duration of
the Bond
a.
$10,000 par value,
coupon rate = 8.6%, rb = 0.16
years
b.
$10,000 par value,
coupon rate = 10.6%, rb = 0.16
c....
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual coupon payments, and
duration as the measure of interest rate risk.
What is the duration of each of the three bonds? (Do not
round intermediate calculations. Round your answers to 2 decimal
places. (e.g., 32.16))
Duration of
the Bond
a.
$10,000 par value,
coupon rate = 8.4%, rb = 0.14
years
b.
$10,000 par value,
coupon rate = 10.4%, rb = 0.14
c....
An insurance company is analyzing the following three bonds, each with five years to maturity, annual...
An insurance company is analyzing the following three bonds,
each with five years to maturity, annual interest payments, and is
using duration as the measure of interest rate risk.
What is the duration of each of the three bonds? (Do not
round intermediate calculations. Round your answers to 2 decimal
places. (e.g., 32.16))
Duration of the bond
a.$10,000 par value, coupon rate = 9.5%, rb = 0.15years
b.$10,000 par value, coupon rate = 11.5%, rb = 0.15
c.$10,000 par value,...
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