Duration Is Defined As

question 32

Multiple Choice

Duration is defined as:

• A)the weighted-average time to maturity of a series of cash flows, using the relative present values of the cash flows as weights
• B)the weighted-average present values of a series of cash flows using the timing of the cash flows as weights
• C)the standard deviation of the time to maturity of a series of cash flows
• D)an asset's or a liability's time to maturity

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Definitions:

Capital Balances

The amounts recorded in the equity section of a company's balance sheet, representing the funds contributed by owners plus retained earnings.

Balance Sheet

A financial statement summarizing a company's assets, liabilities, and shareholders' equity at a particular point in time.

Bonus Method

An accounting technique used to record the transactions related to the admission of a new partner into a partnership by revaluing the existing partners' capital accounts.

Profits and Losses

A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year.