Suppose Sarah has an investment time horizon of 10 years. She buys a bond with a Maturity of 12 years and a Duration of 10 years. Sarah has:

Select one:

a. Made an obvious mistake in not matching the portfolio maturity to her investment horizon.

b. Immunized her portfolio, assuming she liquidates the position in 12 years at maturity.

c. Taken a calculated risk hoping that interest rates go down as she holds her portfolio to maturity.

d. Immunized her portfolio, assuming she liquidates the position in 10 years.