Explain why you agree or disagree with the following statement: "It is always better to have a portfolio with more convexity than one with less convexity."
What will be an ideal response?
It is not always better to have a portfolio with more convexity than one with less convexity. This is illustrated if one examines the portfolios associated with Exhibit 24-5 . Although with all other things equal it is better to have more convexity than less, the market charges for convexity in the form of a higher price or a lower yield. But the benefit of the greater convexity depends on how much yields change. As can be seen from the second column of Exhibit 24-5, if market yields change by less than 100 basis points (up or down), the bullet portfolio, which has less convexity, will provide a better total return.
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Which of the following is NOT part of a target marketing strategy?
A) dividing the market into segments based on customer characteristics B) identifying a market that is likely to buy a product C) selecting one or more segments as target markets D) developing a product to meet the needs of a specific market segment E) positioning a product
The goal of negative feedback is:
A. Not to embarrass or punish employees B. To identify warning signs C. To focus on behaviors that can be changed D. All of the above