Explain the process of immunization to client

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You are preparing a presentation to your client regarding a potential investment in a insurance company. The insurance company has hired a consultant to help it implement an immunization strategy.

1) How do you explain the process of "immunization" to your client?

2) The investment strategy that your client is considering is to buy call options (where the underlying asset is the stock of the insurance company). If the insurance company successfully implements the immunization strategy, how would the value of these call options be affected?

3) The biggest risk currently facing your firm is the risk of increases in the cost of labor. How may your firm hedge that risk?

Reference no: EM132999625

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