9-58 Managers can achieve the results of duration matching by using these to hedge interest rate risk.
A)Rate sensitive assets.
B)Rate sensitive liabilities.
C)Coupon bonds.
D)Consol bonds.
E)Derivatives.

Question

Quizplus · Accepted Answer

Derivatives are the most effective choice for achieving duration matching as they allow managers to create customized positions that match the duration of their liabilities. This can be done through the use of interest rate futures, swaps, and options, which allow for precise control over the duration of a portfolio. Rate-sensitive assets and liabilities, as well as coupon and consol bonds, may help to some extent but are not as effective as derivatives for duration matching.

9-58 Managers Can Achieve the Results of Duration Matching by Using