Financial Statement Time Periods Should Be of Equal Length

question 127

Multiple Choice

Financial statement time periods should be of equal length

• A)and should end during the peak season.
• B)to make comparison easier.
• C)and should correspond to the calendar year.
• D)to comply with income tax regulations.

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Definitions:

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, expressed in years.

Adjustable-Rate Mortgages

A type of mortgage in which the interest rate applied to the outstanding balance varies throughout the life of the loan.

Immunization

A strategy in bond portfolio management aimed at minimizing the impact of interest rate changes on the portfolio's value while ensuring that the portfolio meets future cash flow needs.

Asset Portfolio

A collection of various types of investments held by an individual or institution.