What should be the average duration of assets

Assignment Help Financial Management

Reference no: EM131991350

1. Safelife insurance company has $80 million in assets, $72 million in liabilities, and $8million in shareholders' equity. The duration of liabilities is 8. If Safelife wants to immunize its net worth against interest rate risk (i.e. set the duration of equity equal to zero), what should be the average duration of it's assets?

2. A Forward Rate Agreement contains an agreed interest rate of 2.7% on a 6-month loan. If settled at the time of borrowing, what amount would the borrower pay or receive on a $500,000 loan if the prevailing 6-month interest rate is 2.9%?

Reference no: EM131991350

Questions Cloud

Product differentiation is the basis for much international : Once we recognize that product differentiation is the basis for much international trade, there are likely to be more winners and fewer losers in a country

Suppose the september eurodollar futures contract : Suppose the September Eurodollar futures contract has a price of 95.2. You plan to borrow $75m for 3 months in September at LIBOR,

Why a t test would be the appropriate analysis : Indicate why a t test would be the appropriate analysis for this research question. Describe the variables and their scale of measurement.

Factor-price equalization theorem : The factor-price equalization theorem indicates that with free trade the real wage earned by labor becomes equal to the real rental rate earned by landowners.

What should be the average duration of assets : Safelife insurance company has $80 million in assets, $72 million in liabilities. what should be the average duration of it's assets?

Assess how your personality influences how you lead : Assess how your personality influences how you lead and how you follow. Draw on your professional and personal experience to provide examples.

Elasticity of demand at the equilibrium : If the current demand can be expressed as Q=110-(1/2)P+(1/4)Ps + (5/100)Y , and Ps=90 income Y=500, please calculate the price elasticity

Explain the top three codes for each job : Explore Holland's RIASEC personality types from the textbook, consider three jobs you know well, explain the top three codes you would imagine are necessary.

What kind of market events would result in disequilibrium : What kind of market events would result in disequilibrium? How would this disequilibrium affect the economic markets?

User Account

All Pages