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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RFM analysis is used to analyze and rank customers according to their ________.
A. propensity to respond to marketing stimulus B. motivation and needs C. socioeconomic status D. receptivity to promotions E. purchasing patterns
An example of a type II error would be:
A) counting a student's True/False response incorrect when it is actually correct. B) convicting an innocent defendant. C) eating food that you were unaware was spoiled. D) counting a student's True/False response incorrect when it is actually incorrect.
Credit unions and Internet-only banks typically offer
A) more attractive interest rates to both borrowers and savers. B) less attractive interest rates to both borrowers and savers. C) the same interest rates as brick-and-mortar banks. D) Both A and C are correct.
Uniform laws such as the Uniform Partnership Act are part of state legislative codes
Indicate whether the statement is true or false