When There Are No Embedded Options, ____ Duration Can Be

question 72

Multiple Choice

When there are no embedded options, ____ duration can be used to provide an approximation of the interest rate sensitivity of the bond.

• A) Macaulay
• B) modified
• C) effective
• D) empirical
• E) None of these are correct.

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Definitions:

Interest Charges

Costs incurred for borrowing money, calculated as a percentage of the principal amount loaned.

Account Payable

An obligation of a company to pay a short-term debt to its creditors or suppliers.

Deductions

Amounts subtracted from gross income or revenue to calculate net income or taxable income, including expenses, allowances, and discounts.

Employee Receivables

Amounts owed to a company by its employees, often due to overpayment or advancements.