Some of the Problems with Immunization Are

question 24

Multiple Choice

Some of the problems with immunization are

• A)duration assumes that the yield curve is flat.
• B)duration assumes that if shifts in the yield curve occur,these shifts are parallel.
• C)immunization is valid for one interest rate change only.
• D)durations and horizon dates change by the same amounts with the passage of time.
• E)A,B,and C.

---

Definitions:

Quadratic Equation

A polynomial equation of the second degree, typically presented in the form ax^2 + bx + c = 0, where a, b, and c are constants.

Factoring

The process of breaking down an expression into simpler terms that, when multiplied together, produce the original expression.

Square Root Property

The square root property states that if \(x^2 = a\), then \(x = \pm\sqrt{a}\), assuming \(a\) is non-negative.

Complex Solutions

Solutions to equations that involve complex numbers, which include a real component and an imaginary component.