For Large Interest Rate Shocks and Large Convexity of a Fixed-Income

question 44

Multiple Choice

For large interest rate shocks and large convexity of a fixed-income security or portfolio:

• A)the error will not change compared to smaller interest rate shocks and lower convexity
• B)the error will be smaller compared to smaller interest rate shocks and lower convexity
• C)the error will be greater compared to smaller interest rate shocks and lower convexity
• D)there will be no error as duration measures changes accurately

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