Duration Is Used Primarily as a Measure of

question 17

Multiple Choice

Duration is used primarily as a measure of

• A)The relationship between coupon rate and bond rating
• B)Bond price sensitivity to interest rate changes
• C)The present value of investment inflows
• D)None of the above

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Definitions:

Narrow Definition

The narrow definition refers to a specified or limited interpretation of a term, focusing on a specific aspect or characteristic, excluding broader contexts or meanings.

M1

The narrow measure of the money supply, consisting of currency and coins held by the nonbanking public, checkable deposits, and traveler’s checks.

M1

M1 is a category of the money supply that includes all physical money like coins and currency, as well as demand deposits and other liquid assets held by the central bank.

M2

A measure of the money supply that includes all elements of M1 (such as cash and checking deposits) plus "near money" like savings deposits, money market securities, and other time deposits, which are less liquid and not as easily converted to physical cash.