The Duration Rule Always ________ the Value of a Bond

question 69

Multiple Choice

The duration rule always ________ the value of a bond following a change in its yield.

• A) underestimates
• B) provides an unbiased estimate of
• C) overestimates
• D) The estimated price may be biased either upward or downward, depending on whether the bond is trading at a discount or a premium.

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Definitions:

Constitutional Amendment

A change or addition to the US Constitution, requiring approval by a significant majority in Congress and ratification by a set number of states.

Votes Cast

The total number of ballots submitted by voters in an election, serving as the basis for determining the outcome of that election.

Minimum Age

The legal age set by law that a person must reach to engage in certain activities or responsibilities, such as voting, drinking alcohol, or working.

Presidency

The office held by the president, who is the head of the executive branch in a republic or democratic nation.