The Weighted Average Duration of Liabilities Can Be Increased By

question 4

Multiple Choice

The weighted average duration of liabilities can be increased by:

• A) buying additional 30-year German Government bonds
• B) selling futures contracts on 30-year German Government bonds
• C) buying futures contracts on 10-year German Government bonds
• D) exercising an early repayment option on a long-term senior borrowing

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Definitions:

Medicare Taxes

Taxes deducted from employee paychecks and also matched by employers to fund the Medicare program, a federal health insurance program for individuals who are 65 and older and for some younger people with disabilities.

Accrued Salaries

Salaries that have been earned but not yet paid to employees by the end of an accounting period.

Unemployment Compensation Tax

A tax that employers pay to the government, which is used to fund unemployment benefits for workers who have lost their jobs.

Salaries Payable

Salaries payable represent the amount of salary expenses that have been incurred by a business but have not yet been paid to employees.