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Combination matching can lower the reinvestment risk of a portfolio.

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True

False

True. Combination matching can lower the reinvestment risk of a portfolio.

Contingent immunization strives to match a portfolio's cash flow to its liabilities.

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True

False

False. This matching is called combination matching.

Maintaining a fixed rate of return on a bond for a specific period of time is known as _______.

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Duration

Immunization

Time horizon

Yield

Immunization. Immunization is a way of aiming to help protect returns.

Immunization protects a bond's price from changing interest rates.

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True

False

True. When a bond portfolio is immunized, it is designed to be "immune" to price changes due to fluctuating interest rates.

A bond portfolio is immunized when ________.

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Its time horizon is longer than its duration

Its duration is longer than its time horizon

Its duration is equal to its time horizon

Its duration is equal to its time horizon. A bond portfolio is immunized when its duration is equal to its time horizon.

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