9-23 Investing in a zero-coupon asset with a maturity equal to the desired investment horizon is one method of immunizing against changes in interest rates.

Question

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Investing in a zero-coupon bond with a maturity matching the investment horizon can provide an investor with a known future cash flow and help mitigate the impact of interest rate changes on the portfolio's value over time. The bond's price may fluctuate with changes in interest rates, but the investor will still receive the full face value of the bond upon maturity, effectively immunizing them against interest rate risk.

9-23 Investing in a Zero-Coupon Asset with a Maturity Equal