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Old 06-06-2018, 12:07 AM
fic1234 fic1234 is offline
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Default FE Module, Task 4

Does anyone understand what the "product" is that is being hedged?
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Old 06-06-2018, 12:35 AM
Canadiens Fan Canadiens Fan is offline
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Isn't it a GMMB? Basically the company guarantees that at the maturity date you will get back whatever you invested even if the market returns are poor.
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Old 06-13-2018, 09:32 AM
fic1234 fic1234 is offline
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I can't wrap my head around hedging/debt/equity

I know that you hedge equity, but what about debt?

Say you take out debt to pay your liability cashflows - do you have to hedge the interest payments on debt? Do you pay back your loan by investing in equity? Or can you only pay your loan back with policyholder premiums?
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