The Principle of Duration Matching Is Not

question 29

Multiple Choice

The principle of duration matching is not

• A) used only in bond portfolio management.
• B) a useful concept for investments with target dates.
• C) matching one's assets to one's objectives.
• D) a useful concept for investments with target dates or matching one's assets to one's objectives.
• E) None of the options are correct.

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Definitions:

Day Care Center

A facility that provides care and education for children while their parents or guardians are at work or otherwise engaged.

Vividness Effect

Occurs during decision-making when some salient or vivid facts attract our attention regardless of their actual value as evidence.

Probabilistic Thinking

The ability to understand and reason with probabilities, recognizing that most predictions about the future involve some level of uncertainty.

Placebo Effect

Occurs when individuals receiving a placebo (a “dummy” version of a treatment) experience improvement in their symptoms and attribute the improvement to the placebo.