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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

  1. Label each of the following statements as true or false.

    1. (a) To achieve immunization, the convexity of the assets must equal the convexity of the liabilities.

    2. (b) A portfolio of assets and liabilities with Reddington immunization is protected against any possible change in the interest rate.

    3. (c) The theory of immunization was developed to protect against adverse effects created by changes in interest rates.

    4. (d) Zero-coupon bonds may be created by separating the coupon payments and re- demption values from bonds and selling each of them separately.

    5. (e) The yield rates on stripped Treasuries at any point in time provide an immediate reading of the risk-free yield curve.

    6. (f) The interest rates on the risk-free yield curve are called forward rates.

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