Examlex
The main components/ideas for Precaution Adoption Process Model is:
Duration
A measure of the sensitivity of the price of a bond or a fixed income portfolio to changes in interest rates.
Interest-Rate Risk
The possibility of incurring losses in investments as a result of variations in interest rates, especially impacting fixed-income securities.
Coupon
The interest rate paid by a bond, usually expressed as a percentage of the bond's face value.
Cash Flow Matching
A form of immunization, matching cash flows from a bond portfolio with those of an obligation.
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