The Duration of Any Financial Instrument

question 6

Multiple Choice

The duration of any financial instrument

• A) cannot exceed the instrument's term to maturity
• B) is a proxy for the instrument's default risk
• C) must exceed the instrument's term to maturity
• D) must be calculated before yield to maturity can be accurately determined

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Definitions:

Scoring Rubric

A set of criteria and standards typically used in educational settings to assess the quality of students' work or performance.

Close-Mindedness

The unwillingness to consider or accept different ideas or opinions.

Hostility to Reason

A negative attitude or opposition towards logical argumentation, critical thinking, or the rational resolution of conflicts.

Critical Thinking

A skill of objectively assessing evidence and arguments, to identify biases and assumptions, and make reasoned judgments.