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You want to invest in a bond portfolio that you will use later to payoff a liability due in 7 years. Which of the following
You want to invest in a bond portfolio that you will use later to payoff a liability due in 7 years. Which of the following bond portfolios would immunize you from interest rate risk.
A) Zero coupon bonds with 7 years to maturity | ||
B) A portfolio of bonds with a duration of 7 years | ||
C) A portfolio of bonds with an average 7 years to maturity | ||
d)A and B | ||
e)A and C |
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