If a Ball at the End of a String Is

question 31

Multiple Choice

If a ball at the end of a string is whirled in a vertical circle at constant speed, the tension will be

• A) the same throughout the motion.
• B) greatest at the highest point in the motion.
• C) greatest at the lowest point in the motion.
• D) greatest at a point where the string is instantaneously parallel to the ground.

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Definitions:

Convexity

The curvature of the price–yield relationship of a bond.

Yield

The annual percentage yield received from an investment, including interest or dividends, relative to the cost of that investment.

Rate Anticipation Swap

A switch made between bonds of different durations in response to forecasts of interest rates.

Portfolio Duration

A measure of the sensitivity of a portfolio's value to changes in interest rates, often used for managing the interest rate risk.