Answer: duration of the portfolio
Explanation:
An investment time horizon which is also referred to as the investment horizon is total time that an investor is expected to hold a particular security.
In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to duration of the portfolio.
Answer:
Option (d) is correct.
Explanation:
Cash receipts in month 4
:
Month 4 sales = (30% × 30,000) + (70% × 30000 × 60%)
= $21,600
Month 3 sales = 50,000 × 70% × 25%
= $8,750
Month 2 sales = 70,000 × 70% × 12%
= $5,880
Thus, total cash receipts:
= Month 4 sales + Month 3 sales + Month 2 sales
= $21,600 + $8,750 + $5,880
= $36,230
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Answer:
A is the correct option
Explanation:
Revenue or income is recognized based on accrual concept of accounting where revenue or income is recognized when earned and expenses when incurred not when received or paid in cash.
As a result,on the 31st December Clarion Corp. has earned two months' interest on the 6-month certificate of deposit as it has invested for two months.
The correct option is A,Clarion recognizes interest revenue on 31st December ,2015 only.
It is also important to note that the since 2015 came to end the fraction of interest revenue relating to year 2015 needs to be recognized by debiting accrued income account and crediting investment on the face of the income statement
