In the Evaluation of Bond Portfolio Performance, the Policy Effect

question 9

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 the above.

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Definitions:

Mental Models

Internal representations of external reality that people use to understand and interact with the world around them.

Team's Problem

An issue or obstacle that a group must collectively address and resolve in order to achieve its objectives.

Transactive Memory System

is a shared system among team members for encoding, storing, and retrieving information, aiding in collaborative work.

Metaknowledge

is knowledge about knowledge, understanding how and why certain information is used, or comprehending the processes and structures of knowledge itself.