Which of the Following Is Likely to Have a Negative

question 25

Multiple Choice

Which of the following is likely to have a negative effective duration?

• A) A high coupon, interest only mortgage-backed security that is pre-paying at a high rate.
• B) A low coupon U.S. Treasury bond.
• C) Fed Funds purchased.
• D) Demand deposits
• E) None of the above can have a negative effective duration.

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Definitions:

Diastole

The phase of the heart cycle during which the heart relaxes and fills with blood following contraction.

Pallor

An abnormal paleness of the skin, often indicative of anemia, shock, or serious illness.

Capillary Refill

A test to assess blood circulation where pressure is applied to a nail bed and the time is measured for color to return.

Cardiac Cycle

The complete sequence of events in the heart from the beginning of one heartbeat to the beginning of the next, including systole and diastole phases.