Not to be nitpicky, but since I want everyone to get as many points as
possible, I think the quarterly rate is (1.06)^.25, not 1+(.06/4). I know
that this will not change the answer significantly, but it might change your
grade even slightly - and we all need all the points we can get!!
The answer I come out with (room for error here):
PV Prop = .985
PV Liab = .952
Offset = .70(.985-.953)= .023
The U/w profit for liab is .05-.023 = .027