Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A)As interest rates change,the market values of the securities and cash flows in the portfolio change as well,which in turn alters the weights used when computing the duration as the value-weighted average maturity.
• B)The duration of a portfolio of investments is the simple average of the durations of each investment in the portfolio.
• C)Adjusting a portfolio to make its duration neutral is sometimes referred to as immunizing the portfolio,a term that indicates it is being protected against interest rate changes.
• D)When the durations of a firm's assets and liabilities are significantly different,the firm has a duration mismatch.

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Definitions:

Erectile Dysfunction

A sexual dysfunction characterized by the inability to develop or maintain an erection during sexual activity.

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A therapeutic group activity aimed at encouraging individuals to recall and share personal past events, often used to improve mental health in older adults.

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A term used in gerontology to describe individuals typically aged 85 years and older, often characterized by increased frailty and health challenges.

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