SIE Exam Question 930: Answer and Explanation

Question: 930

Which of the following describes a strategy used to minimize the interest rate risk of bond investments by adjusting the portfolio duration to match the investment time horizon?

• A. Bond hedging
• B. Bond immunization
• C. Bond laddering
• D. Bond spread

Correct Answer: B

Explanation:

Bond immunization is an investment strategy used to minimize the interest rate risk of bond investments by adjusting the portfolio duration to match the investment time horizon.