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

chunty

key rate duration= functional duration = multi functional duration.

kim226

Yeah.  Straightforward comparison of immunization vs. contingent immunization.