Which of the Following Statements Is True

question 11

Multiple Choice

Which of the following statements is true?

• A) If duration > investment horizon, the investor faces net reinvestment risk.
• B) If duration < investment horizon, the investor faces net price risk.
• C) If duration = investment horizon, the investor is immunised.
• D) All of the above statements are true.
• E) None of the above statements are true.

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Definitions:

Mutually Exclusive

Two events that cannot both occur at the same time, often referenced in probability and statistics to describe situations where the happening of one event excludes the occurrence of another.

Subcategories

Specific groups or divisions within a larger category, used to further classify items or data.

Box Plot

A graphical representation of statistical data based on the minimum, first quartile, median, third quartile, and maximum, showcasing the distribution's spread and central tendency.

Median

The middle value in a data set, which divides the data into two halves with an equal number of observations above and below it.