Under a Laddering Approach,investors Can Mitigate the Effects of an Increase

question 40

Multiple Choice

Under a laddering approach,investors can mitigate the effects of an increase in interest rates by:

• A)purchasing bonds with the same maturity dates and selling short bonds with other maturity dates.
• B)purchasing bonds with the same maturity date but different coupon rates.
• C)purchasing bonds with different maturity dates.
• D)purchasing bonds with different yield to maturity.

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Definitions:

Kohlberg

The psychologist Lawrence Kohlberg, known for his theory of moral development which outlines the stages of moral reasoning.

Conventional

Following traditional forms or standards, typically in relation to behavior or beliefs.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior, often influenced by culture, religion, and personal beliefs.

Pruning

In neuroscience, the process by which extra neurons and synaptic connections are eliminated to increase the efficiency of neuronal transmissions.