In Which of the Following Explanations Is the Explanandum Underlined

question 35

Multiple Choice

In which of the following explanations is the explanandum underlined?

• A)I had to wear a different sweater, since I didn't have pants to match this one.
• B)Due to the current strike, all classes will be canceled.
• C)It was impossible to take a relaxing shower, because we were out of hot water.
• D)No one eats at that restaurant anymore, because of its history of health code violations.
• E)The legislation passed easily, since it appealed to the interests of both parties.

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Definitions:

Macaulay Duration

A measure of the weighted average time until all cash flows from a bond are received, used to gauge a bond's interest rate sensitivity.

Yield To Maturity

A measurement of the annual return an investor can expect from a bond if held to its end date, factoring in its price, interest payments, and time to maturity.

Zero-Coupon Bond

A bond that does not pay periodic interest payments but is sold at a deep discount from its face value and pays its full face value at maturity.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indication of interest rate risk.