One Way of Eliminating Both Price Risk and Reinvestment Risk

question 28

Multiple Choice

One way of eliminating both price risk and reinvestment risk is to structure a bond investment so that the duration of the bond or the bond portfolio equals:

• A)the holding period.
• B)the maturity period.
• C)the duration period.
• D)price of the bond.

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Definitions:

Functionalism

A theoretical perspective in social science that emphasizes the societal structures which exist to maintain stability and order in society.

Symbolic Interactionism

A sociological perspective focusing on how individuals interact based on shared meanings and symbols, emphasizing the subjective aspects of social life.

Queer Theory

Argues that people’s sexual identities and performances are so variable that conventional labels such as “male,” female,” “gay,” and “lesbian” fail to capture the sexual instability that characterizes the lives of many people.

Societal Institutions

The structures and mechanisms of social order and cooperation governing the behavior of a set of individuals within a given human community.