Question
Label each of the following statements as true or false. (a) To achieve immunization, the convexity of the assets must equal the convexity of the
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Label each of the following statements as true or false.
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(a) To achieve immunization, the convexity of the assets must equal the convexity of the liabilities.
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(b) A portfolio of assets and liabilities with Reddington immunization is protected against any possible change in the interest rate.
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(c) The theory of immunization was developed to protect against adverse effects created by changes in interest rates.
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(d) Zero-coupon bonds may be created by separating the coupon payments and re- demption values from bonds and selling each of them separately.
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(e) The yield rates on stripped Treasuries at any point in time provide an immediate reading of the risk-free yield curve.
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(f) The interest rates on the risk-free yield curve are called forward rates.
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