All Else the Same, as the Duration of a Bond

question 73

Multiple Choice

All else the same, as the duration of a bond portfolio decreases, the number of bond futures contracts needed to hedge the portfolio will:

• A) increase.
• B) decrease.
• C) not change.
• D) increase only if the duration of the bond portfolio is less than the duration of the bond underlying the futures contract.
• E) increase only if the duration of the bond portfolio is greater than the duration of the bond underlying the futures contract.

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Definitions:

Performance Review

An evaluation of an employee's work performance over a specific period of time.

Appreciation

The recognition and valuing of the qualities or achievements of someone or something, often leading to a positive emotional response.

Incentive Programs

Schemes designed to motivate and encourage people, typically employees, to achieve certain goals or performance levels.

Gratitude

A feeling of thankfulness and appreciation for what one has or has received.