Duration Is a Measure of The

question 61

Multiple Choice

Duration is a measure of the:

• A)yield to maturity of a bond.
• B)coupon yield of a bond.
• C)price of a bond.
• D)effective maturity of a bond.
• E)All of the above.

Recognize the distinction between stocks and bonds as long-term investment vehicles.

Differentiate between money markets and capital markets.

Explain financial intermediation and its impact on investors.

Identify the role of the Securities and Exchange Commission (SEC) and its importance in the financial markets.

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Definitions:

Income Summary Account

An account used to transfer the balances of temporary accounts to a permanent account at the end of an accounting period, summarizing revenue and expenses.

Closing Process

The procedure at the end of an accounting period where income and expense accounts are cleared out to start the new period with a zero balance.

Revenues and Expenses

Pertains to the income generated from normal business operations and the costs incurred to generate that income, crucial for determining net profit.

Special Account

A unique account that is established for a specific purpose, often outside the regular operations or financial structure.