You Make a New Acquaintance at a Football Game, and You

question 51

Multiple Choice

You make a new acquaintance at a football game, and you ask him only questions about sports and athletics. This is an example of probable

• A) external attribution.
• B) confirmation bias.
• C) self-serving bias.
• D) fundamental bias.

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Definitions:

Zero-Coupon Bond

A type of bond that does not pay interest during its life but is sold at a discount from its face value and redeemed at par at maturity.

Immunization Strategies

Financial strategies used to shield a bond portfolio from the effects of interest rate fluctuations by balancing the duration of assets and liabilities.

Interest Rate Sensitivity

The degree to which the value of an investment, particularly fixed-income securities, changes in response to variations in interest rates.

Duration

A measure of the sensitivity of the price of a bond or a bond portfolio to changes in interest rates, usually expressed in years.