When We Improve the Accuracy of the Approximation by Taking

question 19

Multiple Choice

When we improve the accuracy of the approximation by taking account of the curvature of the price-yield curve, the concept is known as:

• A) modified duration.
• B) DGAP.
• C) convexity.
• D) PVBP.

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.

Unlearned Reaction

A natural, instinctive response to a stimulus that occurs without the need for prior learning or experience.

Reflexive Reaction

An automatic, involuntary response to a stimulus.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any learning needed.