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1. Why is the size of the basis point premium larger the longer the term to maturity?
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- How is duration related to the interest elasticity of a fixed income security? What is the relationship between duration and the price of the fixed-income security? ( LG 22-3 )Amortization of premium decreases from period to period? True or False?INTEREST RATE RISK In the context of the repricing gap model, what is the spread effect? How does it affect the change in net interest income?
- What security provides a good estimate of the short-term nominalrisk-free rate?How is duration related to the interest elasticity of a fixed-income security? What is the relationship between duration and the price of the fixed-income security?What security provides a good estimate of the long-term nominalrisk-free rate?
- Is a cap rate the same as an IRR? Which is generally greater? Why?A rates. yield curve states that the long-term interest rate is higher than the short-term interest1. Explain how interest rate risk works?2. Explain the difference between a positively sloping and inverted (downward sloping) yield curve.3. What is the duration and why do we measure it?
- "Fisher effect defines the relationship between nominal rates, real rates, infiation, default premium, and maturity premium". Is the above statement TRUE? O A. Yes O B. NoHow does the expected rate of return concept differ from that of the realized rate of return?When the quantity of a financial security supplied or demanded changes at every given interest rate in response to a change in a factor, this causes a shift in the supply or demand curve true or false ?