A Company Invests $1,000 in a Five-Year Zero-Coupon Bond and $4,000

question 4

Multiple Choice

A company invests $1,000 in a five-year zero-coupon bond and $4,000 in a ten-year zero-coupon bond.What is the duration of the portfolio?

• A) 6 years
• B) 7 years
• C) 8 years
• D) 9 years

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Definitions:

Adequate

Adequate means sufficient for a specific requirement or to meet the needs effectively without being excessive.

Escalating Conflict

The process by which disagreements or disputes grow in intensity or severity, often resulting in more serious confrontations if unchecked.

Limited Searching

A behavior in which individuals or organizations search for information in a restricted manner, often settling for satisfactory solutions rather than the optimal ones.

Escalating Commitment

Escalating Commitment refers to the tendency to continue to invest time, money, or resources into a decision or project despite evidence of it being unwise or failing, often driven by emotional attachment or sunk costs.