26-78 What is defined as the sum of the products of the time when principal payments are received and the amount of principal received all divided by total principal outstanding?
A)Weighted-average life.
B)Burn-out factor.
C)Degree of collateralization.
D)Option-adjusted spread.
E)Time to maturity.

Question

Quizplus · Accepted Answer

This is the definition of weighted-average life, which is a measure of the expected time it will take for the principal of a bond to be repaid, taking into account the timing and amount of principal payments.

26-78 What Is Defined as the Sum of the Products