Decision Trees Are Composed of Nodes (Circles,squares,and Triangles)and Branches (Lines)

question 3

True/False

Decision trees are composed of nodes (circles,squares,and triangles)and branches (lines).

---

Definitions:

Interest Rate Risk

The risk that changes in interest rates will adversely affect the value of an investment, particularly relevant for fixed-income securities.

Bond Prices

The amount of money at which a bond is trading, which fluctuates based on interest rates, credit quality, and other factors.

Market Interest Rates

The prevailing rates at which borrowers can obtain loans and lenders can invest their funds in the financial markets.

Term Structure

Term Structure relates to the relationship between interest rates or bond yields and different terms or time to maturity, graphically represented as a yield curve.