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:

Dividends

Funds disbursed by a company to its shareholders, representing a share of the profits earned by the company.

Total Liabilities

The sum of all financial obligations a company owes to outside parties.

Expenses

Costs incurred by a business in the process of earning revenue, including operational costs, salaries, and utilities.

Retained Earnings

Part of a company's profit that is held or retained and saved for future use, reinvestment, or to pay debt rather than being paid out as dividends to shareholders.