Which of the following are factors that make it difficult to create and maintain a bond index?
A) The universe of bonds is broader than stocks.
B) The universe of bonds is constantly changing due to new issues, bond maturities, calls, and bond sinking funds.
C) It is difficult to derive valuable, up-to-date prices.
D) Bond price volatility is affected by duration, which is constantly changing.
E) All of these are correct.

Question

Quizplus · Accepted Answer

All of the factors listed make it difficult to create and maintain a bond index. The universe of bonds is broader than stocks, constantly changing, and deriving up-to-date prices can be difficult. Additionally, bond price volatility is affected by duration, which is constantly changing.

Which of the Following Are Factors That Make It Difficult