Which of the Following Statements Is False

question 13

Multiple Choice

Which of the following statements is false?

• A) As interest rates change, the market values of the securities and cash flows in the portfolio change as well, which in turn alters the weights used when computing the duration as the value-weighted average maturity.
• B) The duration of a portfolio of investments is the simple average of the durations of each investment in the portfolio.
• C) Adjusting a portfolio to make its duration neutral is sometimes referred to as immunizing the portfolio, a term that indicates it is being protected against interest rate changes.
• D) When the durations of a firm's assets and liabilities are significantly different, the firm has a duration mismatch.

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Definitions:

Self-concept

An individual's perception of themselves, encompassing beliefs, feelings, and thoughts about one's own identity.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Congruent

Corresponding in character or kind; in agreement or harmony.

Unchangeable

Something that cannot be altered, modified, or affected by external forces or actions.