The Practical Application of Bond Portfolio Immunization to Investors Is

question 28

Multiple Choice

The practical application of bond portfolio immunization to investors is that immunization

• A) allows aggressive traders to eliminate the price effects caused by interest rate changes.
• B) allows investors to derive a specified rate of return from bond investments for a given investment horizon.
• C) eliminates the possibility of losing money due to a company defaulting on its bond payments.
• D) allows investors to passively manage their bond portfolio once it is initially immunized.

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Definitions:

Project Sponsor

The person or group who provides the financial resources and support for a project, often holding the authority to make major decisions about the project.

Technological Complexity

Refers to the degree of complexity and sophistication of technological systems, including their design, development, and operation.

Team's Familiarity

The degree to which team members are acquainted with or have experience in the tasks, processes, or technologies involved in a project.

DPCI Rating

A measurement used to evaluate the complexity and risk of projects based on the Darnall-Preston Complexity Index.