Duration Is Defined as the Weighted Average Time to Maturity

question 43

Essay

Duration is defined as the weighted average time to maturity of a financial instrument. Explain how this knowledge can help protect against interest rate risk.

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Definitions:

Analyst Earnings Briefing

A report or presentation by financial analysts discussing a company's earnings performance, often including forecasts and insights based on recent financial statements.

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid customer accounts directly to expense once they are deemed to be uncollectible.

Percent of Sales

A financial ratio that compares various financial metrics as a percentage of total sales, used to analyze operational efficiency and profitability.