The Duration Rule Always ________ the Value of a Bond

question 69

Multiple Choice

The duration rule always ________ the value of a bond following a change in its yield.

• A) underestimates
• B) provides an unbiased estimate of
• C) overestimates
• D) The estimated price may be biased either upward or downward, depending on whether the bond is trading at a discount or a premium.

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Definitions:

REST Technique

Restricted Environmental Stimulation Technique, a method reducing sensory input to promote relaxation or alter consciousness.

Hypertension

A medical condition characterized by high blood pressure, which can lead to serious health complications if left untreated.

Shyness

A temperament or personality trait characterized by feelings of apprehension, lack of confidence, or nervousness in social situations.

Overeating

Consuming food in quantities greater than the body’s energy requirements.