Reading 25 Book 4 curriculum EOC # 27 - contingent claim ris only, concerned, continue, provided

prashantsahni

Hi All,
Question 27 on page 155 asks for the risks that the manager should be concerned about.
The manager’s immunization approach involves only non-callable bonds.  Yet the manager is concerned about contingent claim risk according to the solution provided in the curriculum.
I am not clear as to why the manager should continue to worry about contingent claim risk if he is only holding non-callable bonds.
Your response is much appreciated.
PS

prashantsahni

@ Janakisri,
Without knnowing the source of fund (loan, donation etc) , how logical it is to answer a MCQ asuming it was funded with a loan , when diffrent assumptions lead to diffrent answers.
Anyway thaks for you time and effort. This is my final comment on this!