In Estimating Price Sensitivity, the RiskMetrics Model Prefers to Use

question 26

True/False

In estimating price sensitivity, the RiskMetrics model prefers to use modified duration over the present value of cash flow changes.

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Definitions:

Foot-In-The-Door

A compliance tactic that involves getting a person to agree to a large request by first setting them up by having that person agree to a modest request.

Lowballing

A persuasion and negotiation tactic where an initially low offer is made to secure agreement, with subsequent increases after agreement has been obtained.

Risky-Shift

A phenomenon where a group collectively decides on a course of action that is more extreme than they would have made individually.

Deindividuation

A state of reduced individuality, reduced self-awareness, and reduced attention to personal standards; this phenomenon may occur when people are part of a group.