Immunization Through Duration Matching of Assets and Liabilities May Be

question 53

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 correct.

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Definitions:

Former Students

Individuals who have completed or terminated their studies at an educational institution.

New Students

Individuals who are entering a school, college, university, or any educational institution for the first time or are new to a particular level of education.

Nonsense Syllables

Meaningless sets of letters used in psychological experiments to study memory and learning without prior associations.

Proactive Interference

The phenomenon where older memories interfere with the recall of new information.