SOA Exam FM Sample Question 249
Study guide: Exam FM-2
A company has liabilities of 1000 and 300 due at the end of years two and four, respectively. The company develops an investment program that produces asset cash flows of X and Y at the end of years one and three, respectively. The investment portfolio is constructed to match the present value and duration of the company's payment obligations based on an annual effective rate of interest of 5%.
Calculate \dfrac{Y}{X}.
- A) 2.14
- B) 2.75
- C) 3.42
- D) 4.05
- E) 4.91
Answer this question and see the worked solution