A Portfolio Consists of Three Bonds as Follows

question 74

Multiple Choice

A portfolio consists of three bonds as follows.

What is the duration of the bond portfolio?

• A) 7.12 years
• B) 8.07 years
• C) 8.69 years
• D) 11.4 years

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Definitions:

System II Thinking

is a mode of thought characterized by more deliberate, conscious, and analytical reasoning, often involving complex judgments or problem-solving.

System I Thinking

A term in psychology that refers to the fast, automatic, intuitive approach of decision-making, as opposed to slow, deliberate, analytical thinking.

Confirmation Bias

The habit of seeking out, understanding, preferring, and remembering data in a manner that validates one's already established views or theories.

Hypothesis Testing

A statistical method that is used in making statistical decisions using experimental data.