Which of the Following Is NOT a True Statement

question 6

Multiple Choice

Which of the following is NOT a true statement?

• A) Duration measures the time until the principal is repaid.
• B) Duration is the weighted average of the timing of the bond's payments.
• C) The weights in the calculation of duration are the present value of each payment, divided by the value of the bond.
• D) Modified duration measures the sensitivity of the bond's price to interest rate changes.

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Definitions:

Business Entity Assumption

An accounting principle that treats a business as separate from its owner or any other business.

Business Entities

Business entities refer to legally recognized organizations designed to provide goods or services.

Owners

Owners are individuals or entities that hold legal title to assets, businesses, or property.

Business Entity Principle

The accounting concept that separates the transactions of a business from those of its owners or other businesses.