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27. Which of the following would an investor choose to immunize a bond portfolio over a specific investment time horizon? 1.
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Answer D. 2 and 4, Investor choose following ways to immunize a bond portfolio over a specific investment time horizon

Attempt to eliminate the interest rate risk of the portfolio over the investment time horizon and match the average weighted duration of the portfolio to the investment time horizon.

Reason : Bond immunization is a kind of investment strategy which is used to minimise the interest rate fluctuation of bond by adjusting the portfolio duration with investment time.Interest rate affect bond price inversly thus it effects duration.So in order to immunize a bond portfolio we need to adjust the duration.

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