Question

What is the purpose of immunization techniques in managing traditional life insurance products?

a.

To maximize variations in cash inflows and outflows

b.

To minimize variations in cash inflows and outflows

c.

To eliminate all cash flows dependent on interest rates

d.

To ensure that interest rates remain stable over time

Answer: (b).To minimize variations in cash inflows and outflows Explanation:Immunization techniques are used to match the duration and convexity of assets and liabilities in order to minimize variations in cash inflows and outflows, particularly in response to changes in interest rates.

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Q. What is the purpose of immunization techniques in managing traditional life insurance products?

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