SPECIFIC IDENTIFICATION METHOD Definition

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SPECIFIC IDENTIFICATION METHOD is an inventory costing method under which the actual cost of a particular item is assigned to that item; used for determining cost of goods sold.

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ZERO-RATED SALES is when a sale is taxable at the rate of 0%, i.e. no sales tax. Some examples could be: basic groceries, prescription drugs or certain medical devices.

DURATION, in securities, is a measure in years of interest rate risk for a specific security or portfolio. Duration is the weighted average time to receive the present value of cash flows from a specific security or portfolio. When the duration is divided by the discount rate plus one, the resulting modified duration measures the sensitivity of a bond to changes in interest rates. Used by bond managers instead of maturity as it accounts for all principal and interest cash flows in addition to the final maturity payment. For example, the duration of a 10-year zero-coupon bond equals its maturity of 10, while the duration of a 10-year 7.5% coupon bond is less than seven years.

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