Duration Considers the Timing of All the Cash Flows of an Asset

question 81

True/False

Duration considers the timing of all the cash flows of an asset by summing the product of the cash flows and the time of occurrence.

---

Definitions:

Maturity Value

The amount payable to an investor at the end of a fixed-term investment including the principal and the interest.

Compounded Annually

Compounding annually is a method where interest is added to the principal sum at the end of each year, impacting the total interest earned or paid.

Objective

A goal or target that is aimed to be achieved, often used in planning and strategy contexts.

Compounded Semi-Annually

Interest on an investment that is calculated twice a year and added to the principal sum, affecting the total interest earned.