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:

Diversity Jurisdiction

A legal principle allowing federal courts to hear cases where the parties are from different states or countries and the amount in controversy exceeds a specified threshold.

Federal Court

A court established under the federal judiciary system of a country that deals with matters pertaining to federal laws and constitutional issues.

Amount In Controversy

The monetary value or stake of a lawsuit, determining whether a federal court has jurisdiction over the case.

Constitution

The fundamental law or set of principles by which a country or organization is governed, outlining the structure of government and individual rights.