Duration Is

question 1

Multiple Choice

Duration is:

• A)positively correlated with interest rates and coupon rates but moves in the opposite direction of maturity.
• B)negatively correlated with maturity but moves in the same direction as market rates of interest and coupon rates.
• C)positively correlated with maturity but moves in the opposite direction of market rates of interest and coupon rates.
• D)None of the above

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Definitions:

Immediate Market Period

A very short time frame in economics during which the supply of a good is completely fixed and cannot respond to changes in demand.

Supply

The total amount of a product or service that is available to consumers, which can vary based on price, production costs, and other factors.

Elastic

A term used in economics to describe the sensitivity of the demand or supply of a good or service to changes in its price.

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of any change in price.