Which of the Following Statements Is True Regarding Duration

question 79

Multiple Choice

Which of the following statements is true regarding duration?

• A)increases with the maturity of a fixed-income security but at a decreasing rate.
• B)decreases as the yield on a security increases.
• C)decreases as the coupon or interest payment increases.
• D)is equal to the maturity of an immunized security.
• E)all of the above are true.

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Definitions:

Rational Function

A function that can be expressed as the quotient of two polynomials.

Domain

The set of all possible input values for which a function is defined.

Rational Function

A function represented by the quotient of two polynomials, where the denominator is not zero.

Rational Expression

A ratio of two polynomial expressions, with a non-zero denominator.