As a Bond's Time to Maturity Increases, the Bond's Sensitivity

question 36

Multiple Choice

As a bond's time to maturity increases, the bond's sensitivity to interest rate risk:

• A) increases at an increasing rate.
• B) increases at a decreasing rate.
• C) increases at a constant rate.
• D) decreases at an increasing rate.
• E) decreases at a decreasing rate.

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Definitions:

Manager

An individual responsible for directing and overseeing the work of a group of people in an organization, making decisions, planning, and implementing strategies to achieve goals.

Severity Error

A bias in performance appraisal where the evaluator tends to judge all employees as performing at the same level, usually at an extreme of performance.

Daily Sales Targets

Specific sales performance goals set for a sales team or individual salesperson to achieve within a single day.

Subordinates

Employees who are lower in rank or position and report to supervisors or managers within an organizational hierarchy.