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7. A. Define duration and explain how duration is used in the management of a portfolio of financial securities. B. Why is duration a better

7. A. Define duration and explain how duration is used in the management of a portfolio of financial securities.

B. Why is duration a better measurement of interest rate risk than the time it takes to reduce the principal balance on a loan by 50%?

C. How does maturity and yield affect the sensitivity of a financial security to changes in interest rates?

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