Which of the Following Statements Is True

question 82

Multiple Choice

Which of the following statements is true?

• A) If Duration > Investment Horizon, the investor faces Net Reinvestment Risk.
• B) If Duration < Investment Horizon, the investor faces Net Price Risk.
• C) If Duration = Investment Horizon, the investor is immunized.
• D) All of the above statements are true.
• E) None of the above statements are true.

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Definitions:

Objective Function

A mathematical function used in decision-making processes, often in optimization, representing the goal that needs to be achieved.

Constraints

Restrictions or limitations in decision-making processes or in the optimization of systems, such as resource limits or production capacities.

Constraints

Limitations or restrictions that influence the outcomes of decision-making processes or physical processes.

Objective

A specific result that a person or system aims to achieve within a timeframe with clear, measurable actions.