Weaknesses of the Duration Gap Immunization Model Include All but Which

question 30

Multiple Choice

Weaknesses of the duration gap immunization model include all but which of the following?

• A)Continuously matching the duration of assets and liabilities can be time-consuming and costly.
• B)Duration-based predictions are always incorrect due to convexity.
• C)Duration measurement and management are more complex than the repricing model.
• D)Duration-based immunization strategies require continuous rebalancing of asset and liability durations.
• E)Duration measures only how cash flows change,not the present value of those changes.

---

Definitions:

Research Hypothesis

A specific, testable prediction about the relationship between two or more variables that a study aims to prove or disprove.

Descriptive Statistics

Statistical measures that describe the results of a study; descriptive statistics include measures of central tendency (e.g., mean), variability (e.g., standard deviation), and correlation (e.g., Pearson r).

Prison Sentence

The punishment assigned by a court, typically involving incarceration, for someone convicted of a crime.

Physically Attractive

The attribute of being appealing or pleasing in appearance to the sensory perceptions of others.