Why must an immunized portfolio be rebalanced periodically?
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Bond portfolio is said to be immunized when the risk of change in the value of assets and liabilities due to a change in the level of interest rate is mitigated. Portfolio managers try to invest in zero coupon bonds or in bonds which have a yield until maturity equal to the yield which is the target to achieve the immunization. But practically immunization is done by matching the duration of assets and the liabilities of the pension plan.
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