Which Duration Is Computed by Discounting Flows Using the Yield

question 81

Multiple Choice

Which duration is computed by discounting flows using the yield to maturity of the bond?

• A) Effective
• B) Macaulay Duration
• C) Modified Duration
• D) Present Value Duration
• E) Cash Flow Duration

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Definitions:

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter, expressed with a certain level of confidence.

Confidence Level

The probability, expressed as a percentage, that a parameter lies within a specified range of values, indicating the reliability of an estimate.

Confidence Interval

A span of numbers that holds a certain likelihood of containing the actual value of the parameter.

Confidence Level

Confidence level indicates the probability that a population parameter will fall between two set values for a certain proportion of times.