9-53 Which of the Following Is Indicated by High Numerical

question 3

Multiple Choice

9-53 Which of the following is indicated by high numerical value of the duration of an asset?

• A)Low sensitivity of an asset price to interest rate shocks.
• B)High interest inelasticity of a bond.
• C)High sensitivity of an asset price to interest rate shocks.
• D)Lack of sensitivity of an asset price to interest rate shocks.
• E)Smaller capital loss for a given change in interest rates.

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Definitions:

Economic

pertains to the production, distribution, and consumption of goods and services and how societies allocate their resources.

Technological

Pertaining to technology; involving, using, or relating to the application of scientific knowledge for practical purposes.

Political-Legal Environment

The aspect of the external environment of an organization that deals with the legal and political conditions influencing its operations.

Politicization

The process by which an issue, policy, or action becomes influenced by political considerations or becomes a matter of political debate.