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A client has a cash need at the end of seven years. Which of the following investments might initially immunize the portfolio?
(1) A 9-year maturity coupon bond(2) A 7-year maturity coupon Treasury-note(3) A series of Treasury bills

Respuesta :

federico1636

Answer:

A 9-year maturity coupon bond

Explanation:

Immunization is a dedicated-portfolio strategy used to manage a portfolio with the goal of making it worth a specific amount at a certain point.  Since the 9 years bond has a larger duration , i will have a higher present value at the end of 7 year due to the pending coupons payment.

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