_____________ is a strategy of protecting securities purchased from loss of return,no matter which way interest rates go.
A)Duration
B)Immunization
C)Front-end loading
D)Back-end loading
E)Factorization

Question

Quizplus · Accepted Answer

Immunization is the strategy of protecting securities purchased from loss of return, regardless of which way interest rates go. It involves matching the duration of assets and liabilities to minimize the impact of interest rate fluctuations on the portfolio's overall value. This is achieved by constructing a portfolio that generates enough cash flows to meet liabilities that correspond to their duration.

_____________ Is a Strategy of Protecting Securities Purchased from Loss