Question 4 (20 marks) (A) HSU Insurance is hiring a financial consultant to advise them on portfolio immunization strategy. Critique each of the following statements that were made during his presentations: (i) Statement 1. A great thing about immunization is that it is a "set-and-forget" strategy. That is, once you have immunized your portfol io, there is no subsequent work to be done. (3 marks) (ii) Statement 2. If a portfolio is immunized against a change in the market yield at a given horizon by matching portfolio duration to horizon, the portfolio faces no risk except for default risk. (3 marks) (iii) Statement 3. The liquidity of bonds used to construct an immunized portfolio is irrelevant (i.e. not a factor). (3 marks) (iv) Statement 4. In general, the entire portfolio does not have to be turned over to rebalance an immunized portfolio. (v) Following statement 4 above, to keep a portfolio immunized, rebalancing need not be done on a daily basis