Duration Considers the Timing of All the Cash Flows of an Asset

question 81

True/False

Duration considers the timing of all the cash flows of an asset by summing the product of the cash flows and the time of occurrence.

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Definitions:

Quantity Theory

A theory in economics that asserts the general price level of goods and services is directly proportional to the amount of money in circulation.

Equation of Exchange

An economic formula representing the relationship between money supply, velocity of money, price level, and an economy's output of goods and services.

Economic Problems

Issues arising from the allocation of scarce resources among competing uses, leading to questions of what, how, and for whom to produce.

Velocity of Money

The rate at which money circulates or turns over in an economy in a given period of time, used as an indicator of economic activity.