Multiple Choice
Which of the following is a characteristic of a bullet portfolio?
A) Holding zero- coupon bonds with terms and duration equal to the duration of the benchmark.
B) If the interest rates change, the gains and losses on the portfolio will approximately match those of the benchmark.
C) It consists of two zero- coupon bonds with average duration equal to the duration of the benchmark.
D) A and B.
Correct Answer:
Verified
Correct Answer:
Verified
Q45: The performance of fund managers is often
Q46: Insulating a portfolio from the effects of
Q47: DGAP protects us against uniform changes in
Q48: When DGAP < 0, DA is below
Q49: Can derivatives be used to enhance hedging?
Q51: The sensitivity of the security price to
Q52: Convexity also has the additive property possessed
Q53: A 'bullet portfolio' is one where:<br>A) two
Q54: Marked- to- market implies that assets and
Q55: Which of the following statements is correct?<br>A)