_____ Stocks Are Really Purchased as a Gamble Rather Than

question 16

Multiple Choice

_____ stocks are really purchased as a gamble rather than basing our investment decision on a proven history of good performance.

• A) Blue-chip
• B) Growth
• C) Cyclical
• D) Defensive
• E) Speculative

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Definitions:

Yield Curve

A graphical representation showing the relationship between the interest rates of bonds of the same credit quality but different maturities.

Holding Period

The duration of time an investment is held before being sold.

Modified Duration

A measure that estimates how the price of a bond will change in response to a change in interest rates, adjusting for the bond's yield to maturity.

Convexity

The curvature of the price–yield relationship of a bond.