Question

The principle of duration matching is not

Multiple Choice

a. a useful concept for investments with target dates.

b. None of the options are correct.

c. a useful concept for investments with target dates or matching one's assets to one's objectives.

d. used only in bond portfolio management.

e. matching one's assets to one's objectives.

Answer 1

The principle of duration matching is not just used in only management of bond portfolios . It can be used for other asset classes as well such as cash.

So statement( d.)used only in bond portfolio management is a false statement.

Rest of the statements are true as (a) it is useful concept for investments with target dates and it is also (c) useful concept for investments with target dates or matching one's assets to one's objectives(e.) it also helps in matching one's assets to one's objectives.

So, The principle of duration matching is not (D) Used only in bond portfolio management is correct answer.