Duration Is Seen as a More Complete Measure of an Asset

question 49

Multiple Choice

Duration is seen as a more complete measure of an asset or a liability's interest rate sensitivity than maturity because it takes into account the:

• A)size of cash flows
• B)timing of cash flows
• C)size of cash flows and the asset or liability's time to maturity
• D)time of arrival of all cash flows plus the asset or liability's maturity

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Definitions:

Professional Standards

Established norms and criteria in a profession that practitioners are expected to follow to ensure quality and integrity.

Distributive Justice

Concerns the fair allocation of benefits and resources among individuals in a society or group, considering equity and equality.

Disclosure

The act of making new or secret information known.

Ethics Competency

The ability to recognize, analyze, and act upon ethical issues and dilemmas in a transparent and principled manner.