Where Y = Yield to Maturity,the Duration of a Perpetuity

question 26

Multiple Choice

Where Y = yield to maturity,the duration of a perpetuity would be _________.

• A) Y
• B) Y/(1 + Y)
• C) 1/Y
• D) (1 + Y)/Y

---

Definitions:

Investment Options

Various financial instruments or vehicles in which individuals or entities can place capital in expectation of future financial returns.

Capital Structure

The combination of a company's long-term debt, particular short-term debt, common equity, and preferred equity, taken into account for funding its total operations and expansion.

Equity Issue

An equity issue is the release of new shares by a company to the public or certain investors to raise capital.

Debt Outstanding

The total amount of debt that a company or government has yet to repay.