2012 Q51 - Immunisation question, correct, across

ikoreaii

I think the use of language here is rediculous. They call key rate duration ‘functional duration’ which I’d never come across and so got it wrong. However the question I have is, is answer A:
‘decreasing the dispersion of cash flows around the horizon date’
correct? I think they key here is which one BEST addresses it, but just want to check my understanding of part A) is correct.
Thanks

kim226

Yeah.  Straightforward comparison of immunization vs. contingent immunization.

chunty

key rate duration= functional duration = multi functional duration.