In the Evaluation of Bond Portfolio Performance, the Interest Rate

question 47

Multiple Choice

In the evaluation of bond portfolio performance, the interest rate anticipation 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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