23-60 the Tendency of the Variance of a Bond's Price

question 14

Multiple Choice

23-60 The tendency of the variance of a bond's price to decrease as maturity approaches is called

• A)open interest.
• B)pull-to-par.
• C)digital default option.
• D)futures option.
• E)credit spread call option.

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Definitions:

SEC Regulation

Rules and guidelines set forth by the Securities and Exchange Commission to protect investors and ensure the integrity of the securities markets.

Short Selling

The practice of selling securities or assets that the seller does not currently own, with the intention of buying them back at a lower price.

Dow Jones Industrials

A stock market index that measures the performance of 30 large, publicly-owned companies trading on the New York Stock Exchange (NYSE) and the NASDAQ.

Diversified Portfolio

A combination of various kinds of investments, such as stocks, bonds, and real estate, which aims to reduce overall investment risk.