Suppose that on 12312017 the duration of cumminsrsquo us, Ask an Expert

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Suppose that on 12/31/2017, the duration of Cummins’ U.S. pension liability was estimated at 12 years. Cummins wants its bond investments in the pension fund to hedge 100% of the PBO’s exposure to the discount rate. Using the PBO of $2,765 million, the fair value of pension assets of $3,166 million, and assuming fixed income securities are 68% of plan assets, what duration of fixed income securities need to be purchased.

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Financial Management, Finance

Category:- Financial Management
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