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:

Asset Account

An account on a company's balance sheet that represents the value of the assets owned.

Unearned Revenue

Unearned Revenue represents money received by a company for goods or services yet to be delivered or performed, considered a liability until the revenue is earned.

Liability Account

An accounting category used for recording debts or obligations that a company owes to others, typically excluding equity or ownership stakes.

Accounts Payable

Debts a company incurs from acquiring goods and services on credit, which are due to be paid to creditors.