Quiz Ch 11 – Duration Rule Impact on Bond Value
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What impact does the duration rule have on bond value after a yield change?
What impact does the duration rule have on bond value after a yield change?
What bond type do pension fund managers typically hold to minimize interest rate risk effectively?
Which factors lead to a rise in bond duration?
Which combination of factors leads to the greatest bond price fluctuation?
What strategy predicts bond returns based on anticipated yield curve shifts at the investment horizon’s end?
When interest rates climb, what happens to the duration of a 20-year premium bond?
What financial principle is exemplified by the 2012 situation, where the S&P 500 saw a 16% increase, necessitating substantial contributions to pension funds due to low-interest rates?
How can an insurance firm meet annuity obligations effectively?
What strategy might a savvy bond manager use to maximize capital gain with market economists predicting a rise in interest rates?
How can banks best mitigate interest rate risk?