Last Year,you Created an Immunized Portfolio with an Average Maturity

question 72

Multiple Choice

Last year,you created an immunized portfolio with an average maturity date of 14.5 years,a yield-to-maturity of 9.8 percent,and a duration of 9.6 years.According to the policy of dynamic immunization,you should now modify your portfolio in which one of the following ways?

• A) modify the yield-to-maturity to 9.1 percent
• B) modify the portfolio so the average maturity remains at 14.5 years
• C) modify the portfolio so the average maturity becomes 13.5 years
• D) modify the portfolio so the duration remains at 9.6 years
• E) modify the portfolio so the duration becomes 8.6 years

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Definitions:

Price

The cost at which a product or service is offered to consumers, reflecting its value in the market.

Excess Demand

A situation where the demand for a product or service exceeds its supply in a market.

Price

The amount of money that must be paid to acquire a given product or service.

Quantity Demanded

The amount of a product that buyers are willing and able to purchase at a given price.