Immunization Through Duration Matching of Assets and Liabilities May Be

question 38

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)both A and C are true.
• E)all of the above are true.

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Definitions:

Second Messenger

Intracellular signaling molecules released by the cell in response to exposure to extracellular signaling molecules.

Ion Channel-linked Receptor

A type of cell surface receptor that opens or closes a channel across the cell membrane in response to the binding of a signaling molecule, allowing specific ions to pass through.

G Protein-linked Receptor

A type of cell surface receptor that activates G proteins in response to the binding of a signaling molecule, playing a pivotal role in various signal transduction pathways.

GDP

Gross Domestic Product, a measure of the economic performance of a country, representing the total value of all goods and services produced over a specific time period.