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:

Prosopagnosia

A neurological disorder characterized by the inability to recognize faces.

Stimuli

Any external or internal event or object that influences reactions or responses from a biological organism or system.

Tone Sensitivity

The ability to distinguish different frequencies of sound or musical notes.

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50% of the time.