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:

Biologists

Scientists who study living organisms and their interactions with each other and their environments.

Ventricles

Cavities within the brain that produce and contain cerebrospinal fluid, important for protecting and nourishing the brain.

Meninges

The three layers of protective tissue called the dura mater, arachnoid mater, and pia mater that encase the brain and spinal cord.

Myelin Sheaths

Protective coverings around nerve fibers that facilitate the rapid transmission of neural signals.