Duration Is

question 1

Multiple Choice

Duration is:

• A)positively correlated with interest rates and coupon rates but moves in the opposite direction of maturity.
• B)negatively correlated with maturity but moves in the same direction as market rates of interest and coupon rates.
• C)positively correlated with maturity but moves in the opposite direction of market rates of interest and coupon rates.
• D)None of the above

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, aimed at harmonizing laws across the states.

Time Instrument

A legal document that promises payment of a specified amount of money at a set time or times in the future.

Overdue

A term describing a payment not made by its due date or an action not completed by the scheduled time.

Installment Payment

A method of payment where the total cost is divided into multiple scheduled payments over a period.