The Time Taken for the Process of Communication to Develop

question 50

Multiple Choice

The time taken for the process of communication to develop from a reminder to the urgency stage when writing collection letters depends on

• A) the type of credit account.
• B) the company's knowledge of the debtor.
• C) the organisation's collection policies.
• D) all of the above.

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Definitions:

Par Value Bond

A bond that is selling for its original face value, as opposed to above (a premium) or below (a discount).

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, indicating the price change in percentage terms for a yield move of one percent.

Macaulay Duration

A measure of the weighted average time until a bond's cash flows are paid back, used to assess interest rate risk.