A Relatively High Numerical Value of the Duration of an Asset

question 106

Multiple Choice

A relatively high numerical value of the duration of an asset means which of the following t?

• A)Low sensitivity of an asset price to interest rate shocks.
• B)High interest inelasticity of a bond.
• C)High sensitivity of an asset price to interest rate shocks.
• D)Lack of sensitivity of an asset price to interest rate shocks.
• E)Smaller capital loss for a given change in interest rates.

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Definitions:

Cyber-Agreement

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Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify the laws across the states.

Written Agreement

A documented pact between two or more parties, which is enforceable by law, detailing the terms and conditions of a particular transaction or arrangement.

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