A portfolio is said to be immunized if:
A)the present value of the cashflows equals the principal.
B)the duration of the portfolio is equal to the term.
C)the present value of the cashflows is greater than the principal.
D)the duration of the portfolio is equal to the investment horizon.

Question

Quizplus · Accepted Answer

A portfolio is immunized when its duration matches the investment horizon, minimizing interest rate risk and ensuring that the portfolio's value is protected against interest rate changes.

A Portfolio Is Said to Be Immunized If