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…

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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

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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.

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