When does "duration" become a less accurate predictor of expected change in security prices?
A)As interest rate shocks increase in size.
B)As interest rate shocks decrease in size.
C)When maturity distributions of an FI's assets and liabilities are considered.
D)As inflation decreases.
E)When the leverage adjustment is incorporated.

Question

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The Answer of When does "duration" become a less accurate predictor of expected change in security prices?
A)As interest rate shocks increase in size.
B)As interest rate shocks decrease in size.
C)When maturity distributions of an FI's assets and liabilities are considered.
D)As inflation decreases.
E)When the leverage adjustment is incorporated.

When Does "Duration" Become a Less Accurate Predictor of Expected