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

question 14

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


Definitions:

Mental Set

A psychological tendency or mindset to approach problems in a specific way due to past experiences or habits.

Compensatory Model

An approach in decision making that considers alternatives and compensates for less desirable aspects of options by considering the strengths of other aspects.

Functional Mind Set

An attitude or approach that focuses on practical and effective solutions to problems, emphasizing functionality over abstractness.

Framing

The way information or choices are presented and structured, affecting how that information is perceived and acted upon.

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