To Immunize Your Portfolio, You Should

question 102

Multiple Choice

To immunize your portfolio, you should:

• A)avoid callable bonds.
• B)match bond maturity dates to your target dates.
• C)match bond durations to your target dates.
• D)purchase only par value bonds.
• E)purchase only high-coupon bonds.

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Definitions:

Shareholder Authority

The legal powers granted to shareholders of a corporation, including voting on corporate matters and electing the board of directors.

Straight Voting

A method of voting on corporate directors where shareholders must vote for each board position separately, often disadvantaging smaller shareholders.

Minority Shareholders

Shareholders who do not have a controlling interest in the company, often holding a smaller portion of the company's equity.

Supernormal Growth Model

A model that predicts a period of exceptionally high growth rates for a company before settling down to a stable growth rate.