Periodically Rebalancing a Portfolio So That the Duration Continues to Match

question 1

Multiple Choice

Periodically rebalancing a portfolio so that the duration continues to match the target date is called:

• A)risk assessment.
• B)duration testing.
• C)dedication matching.
• D)portfolio matching.
• E)dynamic immunization.

---

Definitions:

Book Value

The net value of an asset, calculated as its original cost minus depreciation, amortization, or impairment costs.

Acid-Test Ratio

A stringent indicator of a company's liquidity, measuring its ability to cover short-term liabilities with its most liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Accounts Receivable Turnover

A measure of how quickly a company collects cash from its customers, calculated as sales divided by the average accounts receivable.