Immunizing Net Worth from Interest Rate Risk Using Duration Matching

question 119

True/False

Immunizing net worth from interest rate risk using duration matching requires that the duration match must be realigned periodically as the maturity horizon approaches.

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Definitions:

Demand

The desire for a particular good or service combined with the ability and willingness to pay for it.

Emergent Property

A characteristic or phenomenon that arises from the interaction and organization of individual components in a system, not predictable from the properties of the individual parts.

Market Equilibrium

The point at which the quantity of goods supplied equals the quantity demanded at a particular price.

Emergent Equilibria

The spontaneous attainment of stability within a complex system where individual components interact and adjust to changing conditions without central control.