Which of the Following Allows a Security's Cash Flows to Change

question 47

Multiple Choice

Which of the following allows a security's cash flows to change when interest rates change?

• A) Modified duration
• B) Macaulay's duration
• C) Effective duration
• D) Balance sheet duration
• E) Income statement duration

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Definitions:

Canadian Dollars

The currency of Canada, represented by the symbol CAD, and used throughout the country for financial transactions.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

Appreciate

The increase in value of an asset over time.

Canadian Dollar

The official currency of Canada, symbolized as CAD and often referred to as the "loonie."