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:

Leipzig, Germany

A city in the federal state of Saxony, Germany, known for its rich cultural heritage, including music, art, and its role in the history of philosophy and psychology.

Phrenology

A now-discredited theory that suggested the shape and size of the human skull could determine personality traits and mental abilities.

Pseudoscience

Claims, beliefs, or practices presented as scientific but lacking empirical evidence or scientific method.

Hippocrates

An ancient Greek physician often referred to as the "Father of Medicine," known for his contributions to the understanding of disease and the Hippocratic Oath.