The Dictionary Defines Equilibrium as a Situation in Which Forces

question 72

Multiple Choice

The dictionary defines equilibrium as a situation in which forces

• A)are in balance.
• B)are the same.
• C)clash.
• D)remain constant.

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Definitions:

Convexity

The curvature of the price–yield relationship of a bond.

Yield

The annual percentage yield received from an investment, including interest or dividends, relative to the cost of that investment.

Rate Anticipation Swap

A switch made between bonds of different durations in response to forecasts of interest rates.

Portfolio Duration

A measure of the sensitivity of a portfolio's value to changes in interest rates, often used for managing the interest rate risk.