Performance Occurs When the Parties Complete Their Obligations Under the Contract

question 21

True/False

Performance occurs when the parties complete their obligations under the contract.

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Definitions:

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, modified to account for changes in cash flow schedules.

Basis Points

One basis point is equal to 1/100th of 1%, used primarily to denote the change in interest rates, equity indexes, and the yield of fixed-income securities.

Price Decline

A decrease in the market price of an asset or security.

Duration

A measure of the sensitivity of the price of a bond or other fixed-income investment to a change in interest rates, often expressed in years.