SIE - Securities Industry Essentials Exam
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Volatility in a debt portfolio is highest when:
Maturities of the debt securities are short
A
Maturities of the debt securities are long
B
Interest rates are steady
C
The stock market is moving higher and with low volatility
D
Explanations
Short term debt securities are more volatile than longer term debt securities. Steady rates and a low volatility bull market in equities should not make debt securities volatile.