Which of the Following Statements Is True

question 48

Multiple Choice

Which of the following statements is true?

• A)Daily price volatility is calculated as the price sensitivity to a small change in yield multiplied by the adverse daily yield move.
• B)Daily price volatility is calculated as the negative modified duration of a security multiplied by the adverse daily yield move.
• C)The daily price volatility of a security influences how much an FI might lose in case of adverse market movements.
• D)All of the listed options are correct.

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Definitions:

Net Worth

The difference between the total assets and total liabilities of an individual, company, or entity.

Liabilities

Financial obligations or debts that a business or individual owes to others.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.

Taxable Income

The portion of an individual's or organization's income that is subject to taxation by governing authorities.