Which of the following statements regarding immunization is correct?OA.If a bank perfectly matches the maturities of the assets and liabilities, it should achieve perfect immunization forequityholders against interest rate risk.O B. Banks can immunize their portfolios by matching the maturities of their assets with their liabilities.OC.If banks need to satisfy regulatory requirements, they are required to match the durations of their assets with the leverage-adjusted durations of their liabilities.OD.If a bank immunizes a portfolio of its assets or liabilities against interest rate risk, the bank expects that the portfolio willneither gain nor lose its value when interest rates fluctuate.

Immunization is used to save the portfolio immunized from the changes in some variables like…

Answered: Which of the following statements…

Business

Economics

Which of the following statements regarding immunization is correct?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Demand falls by 5 percent for every 10 percent increase in price health care services.

A: Price elasticity of demand: Price elasticity of demand is defined as the percentage change in the…

Q: Will the Vaccines Bring the US Economy Near to Recovery?

A: The outbreak of the COVUD-19 pandemic has been a major trouble for all the economies across the…

Q: Explain what is meant by the following sentence: “All Whole Life policies involve prefunding of…

A: Whole life insurance policies involve certain criteria that needs to be fulfilled by the consumer of…

Q: Suppose that a study finds that the price elasticity of demand for MRI's is 0.3 (in absolute value).…

A: Elasticity of demand refers to how sensitive an item or service's quantity demanded is to variations…

Q: Suppose the government imposes a system of price ceilings in the health care industry as part of an…

A: The price ceiling is a legal maximum on the price at which goods can be sold. Price ceiling can be…

Q: Discuss your views on the effect of price on the demand for urgent or non-urgent medical care.…

A: Effect of price on the demand for urgent or non-urgent medical care. If price of urgent or…

Q: How can deductibles, copayments, and coinsurance reduce moral hazard?

A: A moral hazard is a situation of asymmetric information that arises when one party has an incentive…

Q: Why does taking a drug off a formulary increase the prices to the consumer?

A: At the marketplace, there are many pharmaceutical companies that make their medicines using…

Q: Explain how market failure can be used to justify government intervention in medical care markets

A: Market failure in healthcare could occur due to a number of reasons. This is because healthcare is a…

Q: What would happen if, in order to provide lower cost health care, the government decided to set a…

A: Price ceilings are maximum price upper limits, imposed by the government, above which nobody is…

Q: A medical reported that the consumption of this product has many health benefits Describe how does…

A: As a medical reported that the consumption of this product has many health benefits, Describe how…

Q: If a food product is found to be imminently hazardous, which of the following actions are not…

A: The Food and Drug Administration is in charge of guaranteeing the safety, effectiveness, and…

Q: What impact would child immuniation intervention have on demand and consumer behavior in the long…

A: The use of vaccines in preventing childhood from infectious diseases, known as child immunization…

Q: How do economic evaluations in Healthcare inform policy and other decision makers

A: Economics deals with the allocation of limited resources to maximize the welfare of the economy. It…

Q: Traditional Medicare provides uniform benefits to all recipients in all 50 states.

A: The statement is referring to the structure of the Traditional Medicare program in the United…

Q: Explain how an “individual mandate," where every resident of a country is required by law to…

A: Insurance is a way used by individuals and firms to prevent any event from having a huge detrimental…

Q: What would be the effects on price and quantity if physicians can induce demand?

A: Physicians induced demand implies that physicians are to be held responsible for the higher…

Q: Why has the government chosen to provide moneary incentives to bring about the move to health…

A: HEALTH INFORMATION EXCHANGES They were putting a patient's medical records or data on the internet…

Q: ive example of injections and leakage?

A: The three injections in a circular flow are investment, Government expenditure and Export.…

Q: Suppose the income elasticity of demand for health care insurence is 0.3. If the level of income…

Q: Orphan Drug Act of 1983

A: Introduction- Scientific development throughout the 20th century led to the development of many…

Q: Suppose the government imposes a system of price ceilings in the health care industry as part of an…

A: A price ceiling is a price control that is imposed by the government on a good or service for the…

Q: Where is the bargaining power of consumers greater? 1) The auto industry 2) Pharmaceuticals…

A: Buyer Bargaining Power are the pressures that consumers can exert on businesses to get them to…

Q: explain State policies that mandated the release of physician report cards were greatly beneficial…

A: Several states have begun publishing hospital report cards as a result of state legislative…

Q: Does food labeling influences consumer decision towards healthy eating?

A: Labels include the governmentally mandated Nutrition Facts Label; the worked on front-of-pack Facts…

Q: How do preferences on the available vaccine for COVID19 affect or contribute to microeconomics?…

A: The word "Micro" means "Small" and "Economics" is the subject matter that deals with the economical…

Q: Which international treaties contain provisions that contribute our understanding of a right to…

A: A treaty is a formal, legitimately restricting composed arrangement between entertainers in…

Q: Give an example of supply and demand during the pandemic

A: The supply and the demand of the pandemic would result in the market forces of the demand and supply…

Q: In the United States, most hospitals are non-profit, while nearly all pharmaceutical companies are…

A: There are many reasons that most of the hospitals in the United States are non-profit, one reason…

Q: Suppose the government sets the maximum price for a normal doctor's visit at $20, but the current…

A: Government intervention is considered as the regulatory action that influences the decision-making…

Q: How do fee-for-service and capitation payment systems affect the amount of medical care the patient…

A: Telehealth facilities provide special and inexpensive care to the patients. The main benefit is the…

Q: Should there be one $/QALY for an entire country? How would you expect drug companies to react to…

A: There should be standard minimumprice for drugs.One dillar should be preferrable. Therefore it…

Q: Any two goods in the health market

A: The healthcare market is a multidisciplinary practise area in public health.This novel method…

Q: In Turkey, the general health insurance premium payment obligations are regulated?

A: For part time employees premium payment was reduced but now it has been increased to 30 days.

Q: Price controls decrease the innovation rate for drugs but make existing drugs more affordable. True…

A: In economics, price controls are government-imposed restrictions that ensure that goods and services…

Q: What percentage of total health expenditures in the United States are paid for by government (…

A: Health expenditure alludes to the aggregate sum of money spent on healthcare services and goods…

Q: What does income elasticity of demand mean for insurance companies and medical providers for making…

A: Income elasticity in the case of demand is a tool to measure the change in demand for goods with…

Q: Is the U.S. ready to have a "healthcare for all" program? Why or why not?

A: "Healthcare for all", also known as universal healthcare or single-payer healthcare, refers to a…

Q: According to the article which of the following statements about the dutch disease are correct?

A: The term "Dutch disease" refers to the negative consequences that can result from a rise in the…

Q: The Tucker family has health insurance coverage that pays 80 percent of out-of-hospital expenses…

A: Health-care coverage Tucker is currently residing in the United States with his family. For his…

Question

Which of the following statements regarding immunization is correct?
OA.
If a bank perfectly matches the maturities of the assets and liabilities, it should achieve perfect immunization for
equityholders against interest rate risk.
O B. Banks can immunize their portfolios by matching the maturities of their assets with their liabilities.
OC.
If banks need to satisfy regulatory requirements, they are required to match the durations of their assets with the leverage-
adjusted durations of their liabilities.
OD.
If a bank immunizes a portfolio of its assets or liabilities against interest rate risk, the bank expects that the portfolio will
neither gain nor lose its value when interest rates fluctuate.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Immunization of assets and liabilities

VIEW

Step 2: Explanation

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the ideal of zakat distribution strategies?
Identify the initial equilibrium price and quantity of the drug per day. Suppose the government imposes a price control at $1.50 a dose. How many doses are purchased after the price control is imposed?
According to Health Economists, “more protection does not always leadto less disease”; using the concept of prevalence elasticity of demand for selfprotection explain with an aid of a diagram how this might be the case.
Demand studies in health care have provided estimates of both income and price elasticity. Estimates of income elasticity are usually above +1.0 and estimates of price elasticity typically range between −0.1 and −0.75 (with hospital services at the lower end and elective services at the upper end). What is the significance of these estimates to policy makers?
Which of the following is NOT a healthcare good or service? A)Vaccine B)Patient advocate (social worker) C)Life insurance D)Privately purchased a knee brace
What are the limitations with the Quantity- Quality (QQ) model
What does price elasticity of demand mean for insurance companies and medical providers for making a decision?
Demand studies in health care have provided estimates of both income and price elasticity. Estimates of income elasticity are usually above +1.0. Estimates of price elasticity typically range between -0.1 and -.75 (with hospital services at the lower end and elective services at the upper end). What information do these estimates convey? What does the price elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions? What does the income elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions?
Suppose that Hubert, an economist from an AM talk radio program, and Kate, an economist from a school of industrial relations, are arguing over health insurance. The following dialogue shows an excerpt from their debate: Kate: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits. Hubert: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese. Kate: I disagree. I think government funding of health insurance is useful to ensure basic fairness. The disagreement between these economists is most likely due to (DIFFERENCE IN SCIENTIFIC JUDGEMENT, DIFFERENCE IN VALUES, DIFFERENCE BETWEEN PERCEPTION VERSUS REALITY) . Despite their differences, with which proposition are two economists chosen at random most likely to agree? A. Employers should not be restricted from outsourcing work to foreign nations.…
Should the FDA consider economic factors in new drug approvals?
3rd party payments often cause the cost of health care to go down does third party payments to cover medical costs bring the price of medical services up?
T/F Price is the sole determinant of demand.