Duration

question 15

Multiple Choice

Duration:

• A) is always greater than maturity.
• B) rises as the coupon payment rises.
• C) measures how bond prices change with changes in maturity.
• D) is a measure of total return.
• E) is a measure of how price sensitive a bond is to a change in interest rates.

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Definitions:

Monetary

Relating to money or currency, often referring to financial strategies or policies involving money supply and interest rates.

Non-monetary

Refers to items or assets that cannot be easily expressed in money terms, such as certain intangible assets and physical items.

AASB 121

The Australian Accounting Standards Board guideline on the effects of changes in foreign exchange rates on financial reporting.

Foreign Exchange Rates

The price at which one currency can be exchanged for another currency, which can fluctuate due to market conditions.