Contingent Immunization

question 4

Multiple Choice

Contingent immunization

• A) is a mixed-active passive bond portfolio management strategy.
• B) is a strategy whereby the portfolio may or may not be immunized.
• C) is a strategy whereby if and when some trigger point value of the portfolio is reached,the portfolio is immunized to insure an minimum required return.
• D) a and b.
• E) a,b,and c.

---

Definitions:

Income Tax Expense

The cost incurred by a company due to the taxes on its taxable income.

After-Tax Discount Rate

The discount rate used in analyzing cash flows that accounts for taxes, representing the net cost or benefit of an investment after taxes.

Income Tax Rate

How much of a person's or company's income is taken as tax.

Straight-Line Depreciation

A strategy for dividing the cost of a tangible asset over its service life in identical annual sums.