Which One of the Following Is the Measure of Interest

question 20

Multiple Choice

Which one of the following is the measure of interest rate risk for fixed-income securities?

• A) standard deviation
• B) Macaulay duration
• C) variance
• D) Jensen's alpha
• E) beta

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Definitions:

Dividend Payable

The amount declared by a company’s board of directors to be distributed among shareholders at a set date in the future.

Residual Dividend Policy

A strategy where dividends are based on the earnings left over after all project capital needs are met.

Debt-Equity Ratio

The ratio that measures the relative proportion of shareholders' equity and debt used to finance a company's assets.

After-Tax Earnings

The amount of net income a firm has after all taxes have been paid, representing the company's profitability.