What is the basic underlying principle in animmunization strategy?
What will be an ideal response?
The basic underlying principle in an immunization strategy is to have the duration of the asset equal the duration of the liability. Generalizing this observation to bond portfolios from individual bonds, the key principle is: To immunize a portfolio's target accumulated value (target yield), a portfolio manager must construct a bond portfolio such that (i) the duration of the portfolio is equal to the duration of the liability, and (ii) the present value of the cash flow from the portfolio equals to the present value of the future liability.
You might also like to view...
Which of the following is used in the sales journal to indicate that summary totals have been posted to the general ledger?
a. a check mark; b. an account number; c. SJ; d. X; e. GJ.
When Tommy Hilfiger was an unknown brand, advertising announced his membership as a great US designer by associating him with Geoffrey Beene, Stanley Blacker, Calvin Klein, and Perry Ellis, who were recognized members of that category
Tommy Hilfiger conveyed the brand's category membership by ________. A) relying on the product descriptor B) focusing on reliability C) comparing to exemplars D) announcing category benefits E) identifying counter examples
Answer the following statements true (T) or false (F)
Personal effectiveness can be measured in the same way for all individuals and is not influenced by self-leadership strategies.
Identify a psychological need that you should analyze when learning about the audience for an oral presentation
A) age B) organizational status C) attitudes D) education E) demographics