Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question:
A proprietary life company issues only non-profit guaranteed growth bonds. The company invests only in equities with an expected return of 10% p.a, the risk free rate being 5% p.a. At the balance sheet date there were £100m of equities and growth bonds with a maturity value of £80m, the bonds all maturing in exactly one year's time.
(i) Assuming that the possibility of default by the insurance company may be ignored, calculate, using the result of Modigliani Miller for the cost of equity capital or otherwise, the appropriate risk discount rate to value the shareholder s interest in the portfolio of growth bonds
(ii) Explain the theoretical impact on the risk discount rate of allowing for the default of part or all of policyholder benefits.
(iii) (a) Describe what is meant by franchise value in the context of a life company.
(b) Explain in general terms how the franchise value varies with the amount of capital on the life company balance sheet.
In actual life cash flows occurring above a period of time are frequently uneven. For illustration, the dividends declared through the companies will change from year to year, as s
Trust - Ancient legal practice where one person (GRANTOR) transfers the legal title to an ASSET, known as principal or corpus, to another person (the TRUSTEE), with specific instr
in the absence of no agreement in partnership discuss and explain the provision of partnership act
Determine about the accounting information Numerous user groups have an interest in accounting information relating to a business. Majority of these are outside the business ho
The following market data are available for interest rates and volatilities associated with standard maturities: Suppose you are holding a bond portfolio which invests in a
1-Dec $92,000.00 of 5% bonds are purchased with check. Interest is paid once a year and will mature in 5 years. The market yield for these bonds is 4%.
Calculate the present value and determine the npv, Financial Management. Assume today is 3 December 2009. Helen is 30 years old and has a Bachelor of Business. She is currently em
a) The actual risk-free rate is 3%, and inflation is usual to be 2% for the next 2 years. A 2-year Treasury security yields 6.7%. What is the maturity risk premium for the 2-year s
April 2014 Notepayable $9,825,000 was issued. First due is April 1,2015. 6% interest erroneously expensed a full year''s interest
Montana Company signs a five-year capital lease with Elway Company for office equipment. The yearly lease payment is $20,000, and the interest rate is 8%. 1. Compute the cu
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd