rlsrachaellouisesmith
Ton up Member
Hi
In (ii) of this question I wondered why in particular we would want to invest in liquid bonds with term 10 years in the non-unit reserve. I understand the policy has term 10 years. But this will be a large initial cost so that the interest payments from the bonds were sufficient to cover the difference between charges and expenses throughout the term?
Would there be any need for the bonds to be index linked rather than fixed interest? or would this just depend on the mismatch in charges and expenses - I guess it would just depend on this.
Thank you,
Rachael
In (ii) of this question I wondered why in particular we would want to invest in liquid bonds with term 10 years in the non-unit reserve. I understand the policy has term 10 years. But this will be a large initial cost so that the interest payments from the bonds were sufficient to cover the difference between charges and expenses throughout the term?
Would there be any need for the bonds to be index linked rather than fixed interest? or would this just depend on the mismatch in charges and expenses - I guess it would just depend on this.
Thank you,
Rachael