In 2012, the S&P 500 Increased 16

question 87

Multiple Choice

In 2012, the S&P 500 increased 16%. Given the low interest rate environment, many large companies had to pour billions of dollars into their pension funds. This example illustrates ________.

• A) horizon analysis
• B) convexity
• C) cash flow matching and dedication
• D) duration mismatch

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Definitions:

Microsoft

A global technology company known for its software products, including the Windows operating system and the Office suite.

Sherman Antitrust Act

A landmark federal statute passed in the United States in 1890 that outlawed monopolistic business practices.

Restraints of Trade

Practices or agreements that restrict free competition in business, often scrutinized for legality under antitrust laws.

Consent Decrees

Legal agreements that settle a dispute between parties without admission of guilt but with the agreement to do or stop doing a certain activity.