In the Evaluation of Bond Portfolio Performance, the Policy Effect

question 28

Multiple Choice

In the evaluation of bond portfolio performance, the policy effect refers to

• A) the difference in portfolio duration and index duration.
• B) the extra return attributable to acquiring bonds that are temporarily mispriced relative to risk.
• C) short-run changes in the portfolio during a specific period.
• D) the differential return from changing duration of the portfolio during a specific period.
• E) None of these are correct.

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Definitions:

Logical Components

Fundamental elements that contribute to the structure and reasoning within logic, such as premises and conclusions.

Categorical Proposition

A proposition that asserts or denies that all or some of the members of one category are included in another.

Declarative English Sentences

Sentences that make statements or assertions in English, typically with a subject followed by a predicate.

Categorical Propositions

Statements that relate categories or classes of objects in a specific way, often using quantifiers like "all," "some," or "no."