Duration Is Used Primarily as a Measure Of

question 21

Multiple Choice

Duration is used primarily as a measure of:

• A)the relationship between coupon rate and bond rating.
• B)bond price-sensitivity to interest rate changes.
• C)the present value of investment inflows.
• D)None of the above

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Definitions:

Net Credit Sales

The total amount of sales made on credit, subtracting returns and allowances.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Times Interest Earned Ratio

The times interest earned ratio is a financial metric that measures a company's ability to meet its debt obligations based on its current earnings before interest and taxes (EBIT).

Default in Payment

Occurs when a borrower fails to make a loan payment on time as agreed upon in the loan agreement.