What Is the Difference Between Functional and Dysfunctional Stress? Is

question 80

Essay

What is the difference between functional and dysfunctional stress? Is all stress bad? Why or why not? Give an example of each kind of stress.

Grasp the expectations theory and its implications for the term structure of interest rates.

Analyze the relationships between yield to maturity, coupon rates, and bond prices.

Understand the concept of liquidity premiums and their effect on yield curves.

Calculate forward rates from zero-coupon and coupon bond prices.