THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 239

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The amount of time you have to wait at a particular stoplight is uniformly distributed between zero and two minutes.
-What is the probability that you have to wait between 15 and 45 seconds for the stoplight?

• A)0.15
• B)0.25
• C)0.35
• D)0.45

Understand the basic concepts of bond duration and its role in measuring interest-rate risk.

Determine the factors affecting bond duration and price volatility.

Calculate and interpret Macaulay and modified durations for various bonds.

Analyze the impact of yield to maturity, coupon rate, and time to maturity on bond duration.

---

Definitions:

Fixed Cost Per Period

Costs that do not vary with the level of production or sales within a certain range and time frame, such as rent or salaries.

Mixed Cost

A cost that contains both variable and fixed cost elements and changes in total with the level of activity, but not proportionately.

Maintenance Cost

Expenses incurred to keep property, equipment, or assets in effective operating condition.

Machine Hour

A measure of production time, representing the time a machine is operated to perform work.