An Example of an Active Strategy for Bond Management Would

question 17

Multiple Choice

An example of an active strategy for bond management would be

• A) Buy and hold.
• B) Credit analysis.
• C) Indexing.
• D) Classical immunization.
• E) Horizon matching.

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Definitions:

Neoclassical Economics

A strategy within economics aimed at understanding how the distribution of products, earnings, and outputs is governed by the forces of supply and demand.

Behavioral Economics

An area of study that combines insights from psychology with economic theory to better understand decision-making by individuals and institutions.

Status Quo Effect

The tendency for individuals to prefer to keep things as they are rather than change, often driven by loss aversion and decision-making biases.

Invisible Hand

The tendency of competition to cause individuals and firms to unintentionally but quite effectively promote the interests of society even when each individual or firm is only attempting to pursue its own interests.