Which of the Following Statements Is Incorrect

question 67

Multiple Choice

Which of the following statements is incorrect?

• A)Convexity is a desirable effect to a portfolio manager because it is easy to measure and price.
• B)All fixed-income assets exhibit convexity in their price-yield relationships.
• C)The greater is convexity, the more insurance a portfolio manager has against interest rate increases and the greater potential gain from rate decreases.
• D)The fact that the capital gain effect for rate decreases is greater than the capital loss effect for rate increases is caused by convexity in the yield-price relationship.

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Definitions:

Damages

Financial compensation that a party is ordered to pay to another as a result of harm or injury.

Monetary Loss

Financial detriment or damage suffered by an individual or organization, often resulting from investments, business transactions, or unforeseen expenditures.

Mouthguard

A protective device for the mouth that covers the teeth and gums to prevent and reduce injury to the teeth, arches, lips, and gums.

Teammates

Individuals who are members of the same team, working together to achieve common goals.