9-116 the Shortcomings of This Strategy Are the Following Except

question 68

Multiple Choice

9-116 The shortcomings of this strategy are the following except

• A)duration changes as the time to maturity changes,making it difficult to maintain a continuous hedge.
• B)estimation of duration is difficult for some accounts such as demand deposits and passbook savings account.
• C)it ignores convexity which can be distorting for large changes in interest rates.
• D)it is difficult to compute market values for many assets and liabilities.
• E)it does not assume a flat term structure,so its estimation is imprecise.

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Definitions:

Malcolm X

An African-American Muslim minister and human rights activist known for his advocacy for the rights of blacks and his criticism of the civil rights movement for its emphasis on nonviolence.

Chinese-American Planning Council

A social services organization in the United States aimed at aiding Chinese Americans in navigating educational, housing, and employment opportunities.

Chinese Consolidated Benevolent Association

An organization founded by Chinese immigrants in various American cities as a mutual aid society, often acting as a de facto government within Chinese communities.

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Refers to the social structure, cultural norms, and community practices within the United States.