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Flight-to-safety phenomenon refers to the situation when investors run away from risky assets and re-balance their portfolios with safer investments. The financial crisis 2008-2009 provides

"Flight-to-safety" phenomenon refers to the situation when investors run away from risky assets and re-balance their portfolios with safer investments. The financial crisis 2008-2009 provides a great example of such phenomenon when mutual funds divested much of their equities and risky corporate bonds of their portfolios. Suppose before the crisis Fund A invested solely in long-term corporate bonds and after the crisis it replaced 10% of its portfolio with T-bills. All else equal, such behavior will most likely result in the funds portfolio duration:

a. Being unchanged.

b. Being indeterminate.

c. Being decreased.

d. Being increased.

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