For an investment, the weighted average time to maturity is considered as ___________?
Correct answer: D. duration
- A. premium time
- B. standard time
- C. mean time
- D. duration
Explanation
Duration is the weighted average time at which a bond's cash flows are received, with the weights based on the present value of those cash flows. It is also an important measure of interest-rate sensitivity.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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