(I)The Average Lifetime of a Debt Security's Stream of Payments

question 105

Multiple Choice

(I) The average lifetime of a debt security's stream of payments is called duration.
(II) The duration of a portfolio is the weighted average of the durations of the individual securities,with the weights reflecting the proportion of the portfolio invested in each.

• A) (I) is true, (II) false.
• B) (I) is false, (II) true.
• C) Both are true.
• D) Both are false.

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Definitions:

Grinding Department

A production segment within a manufacturing facility where materials are ground, refined, or processed.

FIFO Method

A method of inventory valuation where the first items purchased or produced are assumed to be the first sold, known as First-In, First-Out.

Conversion Costs

The costs of converting raw materials into finished goods, including labor and overhead expenses.

Mixing Department

A specific stage or location in the manufacturing process where ingredients or components are combined to produce a product.