Volatile high interest rates have directly caused more emphasis on duration analysis because

Question

Quizplus · Accepted Answer

Since volatile high interest rates have caused investors to switch from short-term to longer-term securities, prices of longer-term bonds are more sensitive to shifts in interest rates than shorter-term bonds, and duration analysis measures the degree of bond price sensitivity, all of the options (A, B, and C) are correct. Therefore, the best answer is D.

Volatile High Interest Rates Have Directly Caused More Emphasis on Duration