Which of the Following Statements About Duration Is Incorrect

question 53

Multiple Choice

Which of the following statements about duration is incorrect?

• A) Duration is superior to time to maturity as a measure of price sensitivity to interest rate changes.
• B) Holding other things constant, the duration of a bond increases with time to maturity.
• C) Given time to maturity and yield to maturity, the duration of a bond is higher when the coupon rate is lower.
• D) Given time to maturity, the duration of a zero coupon bond decreases with yield to maturity.

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Definitions:

Key Parties

Key parties refer to the main individuals or groups involved in a specific area of business, such as stakeholders in a project or transaction.

Note

A financial document that represents an agreement for one party to pay another by a certain date, often used to denote debt.

Receivables Owners

Individuals or entities that are entitled to receive payments from customers or clients for goods delivered or services provided.

Accelerate Receipt

Accelerate Receipt refers to the process of speeding up the collection or receipt of funds, often related to accounts receivable or other receivables.