Explain the basic concept of bond duration and why this measure is meaningful to investors
What will be an ideal response?
Answer: Changes in interest rates affect both the price of a bond and the reinvestment rate of the interest payments. A bond's duration is the time-weighted average of its cash flows discounted at the prevailing yield to maturity on the bond. Duration addresses these opposing effects and provides investors with a means of determining how a change in interest rates will affect the price of a bond.
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For delivery of a deed to occur, the grantor needs to _______ and the grantee needs to __________.
a. place the deed in the mail; plan to accept the deed on certain conditions b. physically hand the deed to the grantee; record the deed with the county c. intend to convey title; accept the deed as immediately effective d. intend to convey partial title; record the deed with the county
Small firms that wish to export their products may choose to use ________ who understand the local market and will find buyers and negotiate terms on the firm's behalf
A) direct investors B) franchisees C) export merchants D) franchisors E) free traders