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Stand a Broom Upright on the End of Its Pole

question 52

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Stand a broom upright on the end of its pole and let it topple to the floor. Repeat, but with the bristles end on the floor. The faster fall will be the broom standing on its

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Definitions:

Treasury Bonds

Long-term, interest-bearing securities issued by the government that are considered a safe investment.

Relative Value Strategy

An investment strategy that seeks to identify and exploit differences in the price or rate of securities, often aiming to profit from discrepancies in relative valuation rather than absolute price movements.

On-The-Run Bonds

The most recent issue of a government bond, usually more liquid and yielding slightly less interest compared to older ('off-the-run') bonds.

Nearly Identical Duration

A characteristic of two or more financial instruments whose cash-flows occur over a similar time frame, making their sensitivity to interest rate changes similar.

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