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:

World's Economies

The collective economic systems of the world, encompassing various economies of countries, governed by their policies, trade practices, and currency valuations.

Climate Change

The long-term alteration of temperature and typical weather patterns in a place, often attributed largely to human activities such as burning of fossil fuels.

Greenhouse Gases

Gases in the Earth's atmosphere that trap heat, contributing to global warming and climate change.

Global Warming

The ongoing rise in average global temperatures, mainly attributed to human activities such as burning fossil fuels, leading to climate change and associated environmental impacts.