Which of the Following Is True of PV01

question 15

Multiple Choice

Which of the following is true of PV01?

• A)In a corporate setting,firms that have low PV01s are more exposed to interest rate risk.
• B)High-PV01 bonds are more sensitive to interest rate movements than low-PV01 bonds.
• C)Low-PV01 bonds are more volatile to interest rate movements than high-PV01 bonds.
• D)If a corporation has a stock that has a positive PV01,then acquiring a bond with a positive PV01 will increase the interest rate exposure.

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Definitions:

Team Incentives

Rewards or benefits given to a group of employees for achieving specific goals or performance targets.

Performance Measures

Metrics used to assess the efficiency, effectiveness, and quality of an employee's or organization's work.

Payout Formula

A predefined method or equation used to calculate the amount to be disbursed to individuals or entities, often used in financial contexts like investments or insurance.

Stock Purchase

The act of buying shares in a company, which represents a portion of ownership in the corporation.