9-65 Calculate the Duration of a Two-Year Corporate Loan Paying

question 117

Multiple Choice

9-65 Calculate the duration of a two-year corporate loan paying 6 percent interest annually,selling at par.The $30,000,000 loan is 100 percent amortizing.

• A)2 years.
• B)1.89 years.
• C)1.94 years.
• D)1.49 years.
• E)1.73 years.

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Definitions:

Financial Statements

Consolidated reports detailing the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Inventory

The goods and materials a business holds for the ultimate purpose of resale or processing.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO Method

An inventory valuation method where the first goods purchased are the first ones to be sold, "First In, First Out".