A Primary Advantage of Decision Trees Compared to Decision Tables

question 73

Multiple Choice

A primary advantage of decision trees compared to decision tables is that decision trees:

• A) are more accurate.
• B) are faster.
• C) are smaller.
• D) are cheaper.
• E) can be used for sequential problems.

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Definitions:

Rebalancing

The process of realigning the proportions of assets in a portfolio to maintain the original or desired level of asset allocation and risk.

Durations

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indicator of interest rate risk.

Yield Curve

A graph of yield to maturity as a function of time to maturity.

Immunization

A strategy in fixed-income portfolio management to shield the portfolio's value from interest rate movements.