The Duration of a Coupon Bond

question 61

Multiple Choice

The duration of a coupon bond

• A) does not change after the bond is issued.
• B) can accurately predict the price change of the bond for any interest-rate change.
• C) will decrease as the yield to maturity decreases.
• D) All of the options are true.
• E) None of the options are true.

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Definitions:

Cost of Goods Sold

This accounts for the direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Merchandise Inventory Account

An account on a company's balance sheet that represents the products that a retail or wholesale company plans to sell.

Units of Inventory Purchased

The total quantity of items bought for resale or use in production during a specific period.