In an immunized portfolio, the effects of interest rate risk and default risk largely cancel.

Name: In an immunized portfolio, the effects of interest rate risk and default risk largely cancel.
Brand: Quizplus
Rating: 4.9 (32 reviews)

Question

Quizplus · Accepted Answer

Immunized portfolios are designed to minimize or eliminate interest rate risk, but they do not inherently address or cancel out default risk. Default risk is related to the issuer's financial ability to meet obligations, not interest rate fluctuations.

In an Immunized Portfolio, the Effects of Interest Rate Risk