If the Bond Market Undergoes a Large Change in Yield

question 33

Multiple Choice

If the bond market undergoes a large change in yield (for example, more than 100 basis points) , then a bond's duration will

• A) overstate both the price appreciation when rates fall and the price decline when rates increase.
• B) overstate the price appreciation when rates fall and understate the price decline when rates increase.
• C) understate the price appreciation when rates fall and overstate the price decline when rates increase.
• D) understate both the price appreciation when rates fall and the price decline when rates increase.

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Definitions:

Relationship With Client

The ongoing interaction and bond between a business and its customers, characterized by trust, loyalty, and mutual benefit.

Prospecting Method

Techniques used to identify potential customers or clients for a business's products or services.

Call Back

The action of a salesperson or company returning a phone call to a client or prospect, often to provide information or continue a sales process.

Did Not Buy

A situation in which a prospective customer decides against making a purchase after considering a product or service.