What Is the Duration of a 5-Year Par Value Zero

question 17

Multiple Choice

What is the duration of a 5-year par value zero coupon bond yielding 10 per cent annually?

• A) 0.50 years
• B) 2 years
• C) 4.40 years
• D) 5 years

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on an average cost of all goods available for sale.

Total Cost Transferred

The total amount of costs moved from one stage of production to the next, or from one department to another.

Processing Department

A division within a factory where a specific stage of production is completed, contributing to the transformation of raw materials into finished products.

Cost System

A method employed by a business to track, record, and analyze costs, aiding in financial planning and cost control.