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Life insurance is normally purchased to provide cash for three primary purposes: (1) for income for dependents in case of premature death, (2) for retirement income, and (3) for the payment of estate settlement costs such as debts, claims, lawyers’ fees, and estate taxes. Adequate insurance may prevent a forced sale of business assets on [...]

Two broad strategies exist for interest rate futures arbitrage. Interest rate futures contracts on US Treasury bonds or bills allow for the delivery of the actual bond or a close equivalent (Eurodollar futures involve cash settlement). Take a 20-year bond, with a 8% coupon rate trading at par ($10 000). Assume that this is the [...]