Quiz Ch 11 – Active Management in Bond Immunization
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
Why does immunization of coupon-paying bonds NOT indicate portfolio manager inactivity?
Why does immunization of coupon-paying bonds NOT indicate portfolio manager inactivity?
Which statement is incorrect when adjusting net income to determine net cash provided by operating activities using the indirect method for a statement of cash flows?
What benefits do cash flow matching and dedicated strategies offer?
What is the primary reason why the Financial Accounting Standards Board prefers the direct method of preparing the statement of cash flows?
When does a bank face market value of equity risk due to a duration mismatch between assets and liabilities?
Under what circumstances will the realized rate of return surpass the promised yield for a bond with a 4-year duration held over a 6-year investment horizon?
How does a bond’s duration change with variations in yield to maturity, assuming all other factors remain constant?
How is the realized rate of return affected by changes in interest rates when holding a bond with a 10-year duration for an investment horizon of 6 years?
How does bond convexity impact the price change difference between yield decreases and yield increases of equal magnitude?
How does price sensitivity respond to rising interest rates with bonds above par?