A Portfolio of Bonds Is Immunized from Interest Rate Risk

question 43

True/False

A portfolio of bonds is immunized from interest rate risk if the duration of the portfolio is always equal to the desired investment horizon.

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Definitions:

Lemon Juice

A tart, acidic liquid obtained from lemons, widely used in cooking and beverages for its flavor and high vitamin C content.

Household Ammonia

A cleaning solution made from diluting ammonia gas in water, widely used as a disinfectant and cleaner.

Catabolic

Relating to or involving the breakdown of complex molecules into simpler ones, often with the release of energy, part of the metabolic process.

Endergonic

Describes a reaction that absorbs energy from its surroundings, typically in the form of ATP, and is not spontaneous.