The "Modified Duration" Used by Practitioners Is Equal to the Macaulay

question 58

Multiple Choice

The "modified duration" used by practitioners is equal to the Macaulay duration

• A) times the change in interest rate.
• B) times (one plus the bond's yield to maturity).
• C) divided by (one minus the bond's yield to maturity).
• D) divided by (one plus the bond's yield to maturity).
• E) none of these.

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Definitions:

Sum of Squares

A statistical technique used to describe the total variation or dispersion of a set of values around the mean; used in various analyses, including variance and regression.

Mean Square

The mean square is a statistical measure used in ANOVA and regression analysis, calculated as the sum of squared deviations from the mean divided by the degrees of freedom.

Treatments

Specific conditions applied to groups in an experiment to determine their effect on an outcome.

Mean Square

In analysis of variance (ANOVA), the average of squared differences from the mean, used to assess within-group and between-group variability.