Duration Is

question 37

Multiple Choice

Duration is

• A)the elasticity of a security's value to small coupon changes.
• B)the weighted average time to maturity of the bond's cash flows.
• C)the time until the investor recovers the price of the bond in today's dollars.
• D)greater than maturity for deep discount bonds and less than maturity for premium bonds.
• E)the second derivative of the bond price formula with respect to the YTM.

---

Definitions:

Activity-based Costing

A costing method that assigns costs to products or services based on the activities they require.

First-stage Allocation

The initial process of assigning overhead costs to different departments or cost centers in a business based on relevant criteria.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a factory or plant for allocating overhead costs to products.

Activity-based Costing

An accounting method that identifies the activities that incur costs and then assigns indirect costs to products based on their use of those activities.