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.

Question

Quizplus · Accepted Answer

Immunization is a strategy aimed at managing fixed-income investment risk by aligning the duration of the portfolio with the investor's investment horizon, thereby minimizing the impact of interest rate changes on the portfolio's value.

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