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:

Depreciation Charges

The allocation of the cost of tangible assets over their useful lives, reflecting the decrease in value over time.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Depreciation Expense

A measure of the reduction in value of an asset over time, often used for tax and accounting purposes.

Net Cash Flow

The difference between a company's cash inflows and outflows over a period of time.