Volatile High Interest Rates Have Directly Caused More Emphasis on Duration

question 23

Multiple Choice

Volatile high interest rates have directly caused more emphasis on duration analysis because:

• A)investors have responded to the new environment by switching from short-term to longer-term securities.
• B)prices of longer-term bonds are more sensitive to shifts in interest rates than shorter-term bonds.
• C)duration analysis measures the degree of bond price sensitivity.
• D)All of the above

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Definitions:

U.S. Imports

Goods and services purchased by residents of the United States from other countries.

Services

Intangible products provided to consumers, which could include education, healthcare, and entertainment, among others.

Exchange Rate

The rate at which one currency can be exchanged for another.

Country's Currency

The legal tender or medium of exchange that is issued by a country and used for financial transactions within its borders.