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Face value of the zero-coupon bond

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An insurance company must make payments to a customer of $1 million in one year and $400,000 in four years. The yield curve is flat at 10%. Use annual compounding. If the company wants to fully fund and immunize its obligation to this customer with a single issue of a zero-coupon bond, what must be the face value of the zero-coupon bond?

Reference no: EM132719445

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