9-42 Immunizing the net worth ratio requires that the duration of the assets be set equal to the duration of the liabilities.

Question

Quizplus · Accepted Answer

Immunizing the net worth ratio means managing the assets and liabilities in such a way that the net worth remains relatively stable despite changes in interest rates. This can be achieved by setting the duration of the assets equal to the duration of the liabilities. This helps to minimize the impact of interest rate changes on the net worth. Therefore, the statement is true.

9-42 Immunizing the Net Worth Ratio Requires That the Duration