A State of __________ Exists Whenever the Ratio of One

question 22

Short Answer

A state of __________ exists whenever the ratio of one person's outcomes to inputs equals the ratio of another's outcomes to inputs.

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Definitions:

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%.

Duration

An indicator of how the price of a bond or other debt security responds to interest rate fluctuations, typically represented in years.

Market Yield

Market yield refers to the current rate of return anticipated on a bond if held to maturity, factoring in both its price and interest payouts compared to the market's interest rates.

Interest-Rate Sensitivity

The degree to which the price of an investment, often a bond, responds to changes in interest rates.