When the Weighted-Average Duration of an Investor's Bond Portfolio Is

question 93

True/False

When the weighted-average duration of an investor's bond portfolio is exactly equal to the investor's desired investment horizon, then the bond portfolio is said to be immunized.

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Definitions:

Compound

A substance made up of two or more different elements chemically bonded together in a fixed proportion by weight.

Soluble

Capable of being dissolved in a solvent, typically referring to a substance's ability to dissolve in water.

Carbonyl Group

A functional group consisting of a carbon atom double-bonded to an oxygen atom, with the formula C=O.

Organic Compound

A chemical compound containing carbon atoms covalently bonded to other elements, typically hydrogen, oxygen, and nitrogen, among others.