Which of the following is a major criticism of the pure expectations theory of the term structure of interest rates? It ignores: a. the price risk and reinvestment risk of an investment b. the preference of investors for a particular maturity sector. c. the credit risk of an investment. d. the convexity of an investment Which of the following is a major criticism of the pure expectations theory of the term structure of interest rates? It ignores: a. the price risk and reinvestment risk of an investment b. the preference of investors for a particular maturity sector. c. the credit risk of an investment. d. the convexity of an investment The price of a 5-year zero coupon bond with a current yield to maturity (YTM) of 8.4% is 66.27 . If the YTM increases to 8.9%, the price will decrease to 64.70 . If the YTM decreases to 7.9%, the price will increase to 67.88 . The effective duration is closest to: a. 3.18 b. 5.38 c. 4.80 . d. 2.40