As Applied to Bonds, Duration Refers to

question 82

Multiple Choice

As applied to bonds, duration refers to

• A) the average price and annual reinvestment rate of return for a bond.
• B) the average maturity of a diversified portfolio of corporate bonds.
• C) the point in the life of a bond when its yield- to- maturity equals its expected yield.
• D) the point in the life of a bond when its price exactly offsets its reinvestment risk.

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Definitions:

Withdrawals

Withdrawals refer to the amounts of money or other assets taken from a business by its owner(s) for personal use.

Wage Expense

Wage expense is the total amount of wages and salaries paid to employees by a company during a specific period of time.

Personal Use

The use of a company's assets for the owner's or employees' personal benefits, which can affect the taxable income of the business if not properly accounted for.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods or services.