9-25 Buying a Fixed-Rate Asset Whose Duration Is Exactly Equal

question 100

True/False

9-25 Buying a fixed-rate asset whose duration is exactly equal to the desired investment horizon immunizes against interest rate risk.

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Definitions:

Depositor

refers to an individual or entity that places money into a bank account with the expectation of withdrawing it later or using the banking services.

Payor Bank

The bank upon which a check is drawn and that is responsible for paying the amount specified on the check to the payee.

Collected

Refers to the process of gathering or accumulating items, information, or funds.

Electronic Funds Transfers

The transfer of money between accounts by electronic means rather than the use of cash or paper documents.