Immunization Through Duration Matching of Assets and Liabilities May Be

question 21

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)conventional duration strategies assume a flat yield curve and immunization only protects the nominal value of terminal liabilities and does not allow for inflation adjustment.
• E)All of the options are true.

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