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| Duration hedging involves hedging interest-rate risk by matching the duration of assets with the duration of liabilities. Which of the following is a true statement about duration hedging? A. If duration increases, the volatility of the price of a debt instrument decreases. B. The goal of duration hedging is to equate the duration of assets with the duration of liabilities. C. The firm is immunized against interest-rate risk when the total price change for assets equals the total price change for liabilities. D. Duration is higher if the nominal rate on a debt instrument is higher. |