Immunization Through Duration Matching of Assets and Liabilities May Be

question 51

Multiple Choice

Immunization through duration matching of assets and liabilities may be ineffective or inappropriate because

• A) conventional duration strategies assume a flat yield curve.
• B) duration matching can only immunize portfolios from parallel shifts in the yield curve.
• C) immunization only protects the nominal value of terminal liabilities and does not allow for inflation adjustment.
• D) None of the options are correct.
• E) All of the options are correct.

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Definitions:

Personal Computer Industry

A sector of the technology market that focuses on the manufacturing, distribution, and sale of personal computers and related software and hardware.

ATC Curve

The Average Total Cost curve represents the per-unit cost of production (fixed plus variable costs) at different levels of output.

Efficient

The optimal use of resources to achieve the desired ends with minimal waste or effort, often related to production and allocation.

Economy

A system by which goods and services are produced, distributed, and consumed.