Which One of the Following Statements Is True Concerning the Duration

question 20

Multiple Choice

Which one of the following statements is true concerning the duration of a perpetuity?

• A) The duration of 15% yield perpetuity that pays $100 annually is longer than that of a 15% yield perpetuity that pays $200 annually.
• B) The duration of a 15% yield perpetuity that pays $100 annually is shorter than that of a 15% yield perpetuity that pays $200 annually.
• C) The duration of a 15% yield perpetuity that pays $100 annually is equal to that of 15% yield perpetuity that pays $200 annually.
• D) the duration of a perpetuity cannot be calculated.
• E) None of these.

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Definitions:

Independent Variable

In an experiment, the variable that is manipulated or changed to observe its effects on a dependent variable.

Nomothetic

An approach in psychology that seeks to understand the general laws that govern behavior, by studying large groups of individuals.

Idiosyncratic

Pertaining to peculiar or individual characteristics or behaviors that distinguish someone or something from others.

Individualistic Understanding

A way of interpreting information or phenomena based on personal perspectives and independent thought.