197

question 172

Multiple Choice

197. Either the straight-line method or the effective-interest method of amortization will always result in

• A) the same amount of interest expense being recognized over the term of the bonds.
• B) the same amount of interest expense being recognized each year.
• C) more interest expense being recognized than if premium or discounts were not amortized.
• D) the same carrying value each year during the term of the bonds.

---

Definitions:

Market Index

A statistical measure that reflects the overall movement of the market or a specific sector of the market.

Global Minimum Variance Portfolio

An investment portfolio that aims to achieve the lowest possible level of risk (variance) for a given rate of expected return, comprising assets from around the world.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, often used in finance to gauge the volatility of an investment's return.

Monthly Excess Returns

Returns from an investment over and above the risk-free rate of return on a monthly basis, used to evaluate investment performance.