Solve the Problem

question 9

Multiple Choice

Solve the problem.
-A and B are events in a sample space S such that P(A) = 0.42, P(B) = 0.32, and P(A and B) = 0.22. Use a Venn diagram to find the probability that B occurs but A does not.

• A) 0.1
• B) 0.48
• C) 0.2
• D) 0.32

---

Definitions:

Yield To Maturity

The total return expected on a bond if the bond is held until its maturity date.

Coupon Bond

A debt security that pays the holder a fixed interest amount (coupon) at scheduled intervals until the maturity date, when the principal amount is repaid.

Interest-Rate Risk

Interest-rate risk is the risk that changes in interest rates will negatively affect the value of an investment, particularly relevant for fixed-income securities.

Bond Duration

A measure of the sensitivity of a bond's price to changes in interest rates, representing the weighted average time until a bond's cash flows are received.