The 'Modified Duration' of a Security Refers to the Percentage

question 26

True/False

The 'modified duration' of a security refers to the percentage change in the yield when the interest rate changes 1%.

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Definitions:

Deductive Reasoning

Deductive reasoning is a logical process in which a conclusion is based on the concordance of multiple premises that are generally assumed to be true.

Object Permanence

The realization that items persist in existence even when they are not visible, audible, or perceptible in any way.

Rehearsal

A mnemonic strategy of repeating information (either aloud or silently) to facilitate retention and later retrieval.

5-Year-Olds

Refers to children typically in the early childhood developmental stage, characterized by rapid growth in language, cognitive abilities, and social skills.