Age Is a Quantitative Variable, but One Could Recode the Values

question 10

True/False

Age is a quantitative variable, but one could recode the values so that it would be transformed into a dichotomous variable.

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Definitions:

Duration

An indicator of how a bond or debt security's price is affected by interest rate fluctuations, usually stated in terms of years.

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or current market value.

Convexity

A gauge of how changes in interest rates affect the relationship between the price of bonds and their yields, showing alterations in the bond's duration.

Price-yield Curve

A graphical representation that shows the relationship between the yield of a bond and its price, demonstrating how bond prices move inversely to changes in yield.