Effective Duration

question 14

Multiple Choice

Effective duration:

• A) estimates when embedded options will be used.
• B) directly indicates how much the price of a security will change given a change in interest rates.
• C) is always greater than maturity.
• D) is a weighted average of the time until cash flows are received.
• E) All of the above

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Definitions:

Global Organizations

Entities operating on an international scale, dealing with various cultures and regulatory environments, and managing operations across multiple countries.

Fund-Raising

A process of gathering voluntary contributions of money or other resources, typically for the purpose of supporting non-profit organizations, political campaigns, or other causes.

Philanthropy

The act of donating money, goods, services, and time to support a socially beneficial cause, aiming to improve human welfare.

Equity

The value of an ownership interest in property or a business, minus liabilities; in finance, it often refers to stocks or shares representing ownership in a corporation.