The Only Difference Between Simple Weighted Average Life of a Bond

question 56

Multiple Choice

The only difference between simple weighted average life of a bond and duration of a bond is

• A)The timing of interest payments
• B)Duration involves the present value of individual cash flows
• C)Duration involves the using of the stated value of individual cash flows
• D)None of the above

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the issuing company’s ledger but have not yet been cashed or cleared by the bank.

Journal Entry

A record of a financial transaction in accounting, detailing the accounts affected and the amounts.

Bank Service Charge

Fees charged by a bank to cover services provided to the account holder.

Ledger

A comprehensive collection of a company's financial transactions, recorded in a structured and systematic manner.