Portfolio Managers Who Anticipate an Increase in Interest Rates Should

question 23

Multiple Choice

Portfolio managers who anticipate an increase in interest rates should

• A) act to keep the duration constant
• B) increase the portfolio duration
• C) decrease the portfolio duration
• D) invest in junk bonds

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Definitions:

Language Acquisition

The process by which humans acquire the ability to perceive, produce, and understand language, typically occurring in childhood.

Classical Conditioning

A training method where two signals are consistently linked together, leading to a reaction initially triggered by the second signal being subsequently triggered by the first signal alone.

Acquisition

Acquisition refers to the initial stage of learning when a response is first established or the phase during which a new behavior is being learned.

Extinction

In psychology, the process through which a previously reinforced behavior is weakened by the removal or absence of reinforcement.