Buying a Fixed-Rate Asset Whose Duration Is Exactly Equal to the Desired

question 115

True/False

Buying a fixed-rate asset whose duration is exactly equal to the desired investment horizon immunizes against interest rate risk.

---

Definitions:

Primary Phobias

The intense, irrational fears of specific objects or situations that are a primary psychological concern.

Innate Phobias

Pre-programmed fears that are believed to be evolutionary acquired and common across individuals, such as fear of snakes or heights.

Blood-injection-injury Phobia

An intense, irrational fear of blood, injury, or the possibility of receiving an injection, often leading to avoidance behavior and sometimes fainting.

Situational Phobia

A type of anxiety disorder characterized by an irrational fear of specific situations, such as flying, heights, or enclosed spaces.