Task X Has an 82 Percent Probability That It Will

question 27

Multiple Choice

Task X has an 82 percent probability that it will be completed in 20 days or less.The standard deviation of its duration is five days.What is its expected duration?

• A)15.4 days
• B)15.9 days
• C)19.1 days
• D)12.3 days

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Definitions:

Call Premium

The extra amount over the par value that a buyer must pay to purchase a call option, which gives the right, but not the obligation, to buy an asset at a specified price.

Zero-Coupon Bond

A type of bond that is sold at a discount to its face value, pays no interest (coupon), and is redeemed at its face value at maturity.

Face Value

The nominal value or dollar value of a security stated by the issuer, also known as the "par value" especially in the context of bonds.

Quoted

The stated price at which a security is offered for sale on a stock exchange or in the financial markets.