Describe the effectiveness of duration as a tool in hedging bonds
What will be an ideal response?
Duration is good, but not perfect. Duration changes as bond prices change and it assumes all YTM shift in concert. This assumption is false.
Business
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The cost of debt capital is obtained by substituting the net proceeds per bond for the bond price in
the bond valuation equation and solving for the required return. Indicate whether the statement is true or false
Business
A ________ agreement normally states the exact conditions and procedures for the purchase of an account
A) factoring B) pledging accounts receivable C) revolving credit D) line of credit
Business