Figure 2-6 -Refer to Figure 2-6. What Was the Most Likely Cause

question 72

Multiple Choice

Figure 2-6
-Refer to Figure 2-6. What was the most likely cause of the movement from point C to point D?

• A) unemployment
• B) a decrease in society's preference for bananas
• C) a decrease in society's preference for playing baseball
• D) a shift to a longer working day

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Definitions:

Indexing

The investment strategy of replicating the performance of a market index, often through passive fund management.

Duration

A measure of the sensitivity of the price of a bond or a fixed income portfolio to changes in interest rates.

Interest-Rate Risk

The possibility of incurring losses in investments as a result of variations in interest rates, especially impacting fixed-income securities.

Coupon

The interest rate paid by a bond, usually expressed as a percentage of the bond's face value.