Volatile High Interest Rates Have Directly Caused More Emphasis on Duration

question 23

Multiple Choice

Volatile high interest rates have directly caused more emphasis on duration analysis because:

• A)investors have responded to the new environment by switching from short-term to longer-term securities.
• B)prices of longer-term bonds are more sensitive to shifts in interest rates than shorter-term bonds.
• C)duration analysis measures the degree of bond price sensitivity.
• D)All of the above

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Definitions:

Buying Organization

An entity focused on purchasing goods and services, typically seeking to optimize procurement processes and costs.

Incongruent

Lacking harmony, consistency, or compatibility between aspects or elements.

Supply Objectives

Goals aimed at ensuring the efficient and effective procurement, management, and distribution of materials and products.

Corporate Strategy

The overall plan and direction of a company, focusing on achieving long-term business objectives and competitive advantage.