Which of the Following Statements About Macaulay Duration Is Correct

question 23

Multiple Choice

Which of the following statements about Macaulay duration is correct?

• A) a bond's coupon rate and Macaulay duration are positively related.
• B) a bond's Macaulay duration is inversely related to its yield-to-maturity.
• C) The Macaulay duration of a zero-coupon bond is less than its time-to-maturity.

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Definitions:

Alternative Hypothesis

The hypothesis that proposes a specific relationship between variables, contrary to the null hypothesis.

Directional Hypothesis

A hypothesis that specifies the direction of the expected difference or relationship between two variables.

Null Hypothesis

A statement in statistics that there is no significant difference or effect, and any observed difference is due to sampling or experimental error.

Alternative Hypothesis

A statistical hypothesis that suggests a difference or effect, opposite to the null hypothesis.