Help
Course Catalog > Bonds > 100
Bonds 104: Immunization

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Contingent immunization strives to match a portfolio's cash flow to its liabilities.
Choose wisely. There is only one correct answer.
False. This matching is called combination matching.
2.
When interest rates rise, ________.
Choose wisely. There is only one correct answer.
Neither choice is correct. When interest rates rise, a bond's price decreases and its reinvestment rate increases.
3.
Maintaining a fixed rate of return on a bond for a specific period of time is known as _______.
Choose wisely. There is only one correct answer.
Immunization. Immunization is a way of aiming to help protect returns.
4.
Combination matching aims to match a bond portfolio duration to its time horizon, cash flow, and goals.
Choose wisely. There is only one correct answer.
True. In combination matching, the bond portfolio not only aims to match its duration to its time horizon, but also its cash flow and goals.
5.
A bond portfolio is immunized when ________.
Choose wisely. There is only one correct answer.
Its duration is equal to its time horizon. A bond portfolio is immunized when its duration is equal to its time horizon.