Which of the following is NOT a characteristic of the liability-mimicking portfolio for a pension? The liability-mimicking portfolio: A. has an exposure to interest rate changes. B. is independent of economic growth. C. recognizes economic liability.
The liability-mimicking portfolio recognizes that the future liability is subject to market related risk, i.e., it is an economic liability. Market risk is that from interest rate risk, inflation risk, or from an exposure to economic growth.
