Duration Is Considered a Good Measure of Risk for a Bond

question 11

True/False

Duration is considered a good measure of risk for a bond portfolio because it indicates the relative volatility of the bond or portfolio due to interest rate changes and the rating of the bonds.

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Definitions:

Marginal Tax Rate

Additional taxes paid divided by taxable income.

Liberal Economists

Liberal economists advocate for minimal government intervention in the economy, emphasizing free markets, free trade, and the importance of individual choice and freedoms in economic matters.

Conservative Economists

Economists who generally advocate for reduced government spending, lower taxes, and minimal government intervention in the economy.

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without additional government action, such as progressive tax systems and welfare.