KIC000073 - Exhibit 25-9 Modified Durations of Selected...

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Exhibit 25-9 Modified Durations of Selected Bonds B(JJ1d I !\1U1lified Ijursuon I 3.90 !-}'eIIr JO.l25% coupon, sellil\8fOJ" 88,20162 5.18 Immunization Risk .:. Immunizanon Risk + a ~ of risk fDr immunized portfolios is equal to CF1Cl-Hi CF.(Z-H)l ...... +CF,,(n-H); J.y + (l+.r)~ (1+)')" where cr, - emil jIOtl' of I~ porrfollo at trm~ pcntJ 1. H .. lellglh (m years) of 1M 11nll!.lIll1e11111orCon rJr OQbiluydue dale,}' - portfolio yield. and II" mne m ~lpI ofrM last r:asJ>flUt<'. -+ The objt:etM: irJ ~ an immunized portfolio is to milch ~ ponf'oio'$ dillllUOUIO the !i;mility's duration sdec1 the portfolio 1111.I minimizes the immunization risk. oJ- The. imrTll.ltliutioo risk ~ can be L15ed to coratnu:;t8ppraxD:rwe e<:>n!idenc.e imervals fur 1M \:arid yield and ~ WBCI aceulJr.lwed vefue Structuring a Portfolio to Satisfy Multiple Liabilities .:. For pension funds, there are multiple liabilities that must be: satisfied - payments 10 the beneficiaries of
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KIC000073 - Exhibit 25-9 Modified Durations of Selected...

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