Option Adjusted Duration Can Be Calculated as

question 90

Multiple Choice

Option adjusted duration can be calculated as

• A)Duration of noncallable bond - duration of call option on the bond.
• B)Duration of noncallable bond + duration of call option on the bond.
• C)Duration of callable bond - duration of call option on the bond.
• D)Duration of callable bond + duration of call option on the bond.
• E)None of the above.

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Definitions:

Inflation Rate

The level at which the total pricing metrics for goods and services peak, impairing the utility of money.

Inflation Rate

The acceleration in the average cost levels for goods and services, hindering effective buying power.

Price Index

A statistical measure that examines the weighted average of prices of a basket of consumer goods and services over a period of time.

GDP Deflator

A measure of the price level of all domestically produced final goods and services in an economy, used to convert nominal GDP into real GDP.