Immunization is accomplished by calculating the duration of the promised outflows and then investing in a portfolio of bonds that has a(n) _____ duration.

Question

Quizplus · Accepted Answer

Immunization is achieved by matching the duration of the assets (in this case, a portfolio of bonds) with the duration of the liabilities (promised outflows), hence the correct answer is a portfolio with an identical duration.

Immunization Is Accomplished by Calculating the Duration of the Promised