Which of the Following Risks Can Be Essentially Eliminated by Immunizing

question 33

Multiple Choice

Which of the following risks can be essentially eliminated by immunizing a bond portfolio?
I. default risk
II. price risk
III. reinvestment risk
IV. liquidity risk

• A) I, II and III only
• B) II and III only
• C) II, III and IV only
• D) I, II, III and IV

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Definitions:

Collective Ownership

The shared control and ownership of assets, resources, or enterprises among a group of people or within a community, as opposed to individual privatization.

Bureaucracy

An organizational structure characterized by standardized procedures, hierarchical divisions, and a clear set of rules guiding operations.

Rational Organization

An approach to organizational management that emphasizes efficiency, predictability, calculability, and control through a structured and logical framework.

Bureaucracy

A system of government or business administration characterized by a hierarchy of authority, a clear division of labor, explicit rules, and impersonality in the application of rules.