Some of the Problems with Immunization Are

question 30

Multiple Choice

Some of the problems with immunization are

• A) duration assumes that the yield curve is flat.
• B) duration assumes that if shifts in the yield curve occur, these shifts are parallel.
• C) immunization is valid for one interest-rate change only.
• D) durations and horizon dates change by the same amounts with the passage of time.
• E) immunization is valid for one interest-rate change only, duration assumes that the yield curve is flat, and that if shifts in the yield curve occur, these shifts are parallel.

---

Definitions:

Treasury Stock

Treasury Stock represents shares that were issued and subsequently repurchased by the company, reducing the amount of outstanding stock on the open market.

Common Stock

A type of security that represents ownership in a corporation, granting holders voting rights and a share in the company’s profits via dividends.

Treasury Shares

Shares that were once part of the circulating supply of stock but were subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Financing Activities

Processes that involve the flow of cash between a company and its owners and creditors, affecting the equity and debt of the business.