A Bond Has a Maturity of 12 Years and a Duration

question 20

Multiple Choice

A bond has a maturity of 12 years and a duration of 9.5 years at a promised yield rate of 8%. What is the bond's modified duration?

• A) 12 years
• B) 11.1 years
• C) 9.5 years
• D) 8.8 years

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Definitions:

Budget Variance

The difference between the budgeted or planned amount of expense or revenue, and the actual amount incurred or received.

Fixed Overhead Budget Variance

The variance between the budgeted and the actual incurred fixed overhead expenses.

Manufacturing Overhead Applied

The portion of estimated manufacturing overhead cost that is assigned to each unit of production based on a predetermined rate.

Labor-Hour

A labor-hour represents an hour of work performed by an employee, typically used as a basis for allocating labor costs or measuring productivity.