How much must pension fund spend now to fully fund outflow

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Reference no: EM131872089

A pension fund owes $1,000,000 in 8 years. To fund this outflow, the insurer wishes to buy STRIPS that match in duration. The STRIPS have a $10,000 face value per STRIP and pay a 6 percent APR with semiannual compounding. How much must the pension fund spend now to fully fund the outflow?

Reference no: EM131872089

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