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.

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Definitions:

Freud's Theory

A set of psychological theories developed by Sigmund Freud that emphasize the importance of unconscious processes, sexual and aggressive instincts, and early childhood experiences.

Oedipus Complex

A psychoanalytic theory by Freud that a child has an unconscious desire for the opposite-sex parent and jealousy towards the same-sex parent.

Territorial

Pertaining to the ownership or use of specific areas of land or space, often relating to animals or countries defending specific regions from intruders.

Psychosexual Development

Freud's theory of the stages of sexual development from infancy to adulthood, each characterized by erogenous zones and conflicts.