Volatile High Interest Rates Have Directly Caused More Emphasis on Duration

question 45

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

---

Definitions:

Top Management

The highest level of executives responsible for the strategic direction and decision-making in an organization.

Trust the Process

A phrase encouraging belief in and adherence to a specific plan or system, despite potential uncertainty or slow progress.

Electronic Data Interchange (EDI)

The electronic transfer of business information using a standardized format, allowing different systems to communicate directly with each other.

Process Cycle Time

measures the total time taken to complete a business process from start to finish, indicating process efficiency.