Which of the Following Statements Is True

question 28

Multiple Choice

Which of the following statements is true?

• A)Convexity is desirable because the larger the convexity the greater the interest rate protection against interest rate decreases and the greater the potential gains following increasing interest rates.
• B)Convexity is desirable because the larger the convexity the greater the interest rate protection against interest rate rises and the greater the potential gains following decreasing interest rates.
• C)Convexity is undesirable because the larger the convexity the lower the interest rate protection against interest rate rises and the smaller the potential gains following decreasing interest rates.
• D)Convexity is undesirable because the larger the convexity the lower the interest rate protection against interest rate decreases and the smaller the potential gains following increasing interest rates.

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Definitions:

Knowledge Management

The systematic process of creating, sharing, using, and managing the knowledge and information of an organization, to ensure its optimal use and proliferation.

Data

Facts and statistics collected together for reference or analysis.

Unprocessed Numbers

Raw numerical data that have not been subjected to analysis or manipulation.

Raw

Uncooked, in its natural state; used often in the context of foods not subjected to heat or processing.