Which of the Following Statements Is False

question 52

Multiple Choice

Which of the following statements is false?

• A) Interest rate swaps are an alternative means of modifying the firm's interest rate risk exposure without buying or selling assets.
• B) A portfolio with a negative duration is called a duration-neutral portfolio or an immunized portfolio, which means that for small interest rate fluctuations, the value of equity should remain unchanged.
• C) Maintaining a duration-neutral portfolio will require constant adjustment as interest rates change.
• D) A duration-neutral portfolio is only protected against interest rate changes that affect all yields identically.

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Definitions:

Pattern

A recognizable repetition of elements or designs, often identified in nature, human behavior, or manufactured objects.

Figure-Ground Relationships

A visual perception principle distinguishing an object (the figure) from its surrounding area (the ground).

Objects

Physical items that occupy space and have properties that can be perceived by the senses.

Shape Constancy

The perceptual phenomenon whereby the perceived shape of an object remains constant even when its orientation to the viewer changes.