The Modified Duration

question 83

Multiple Choice

The modified duration:

• A) is equal to the Macaulay duration divided by (1 + Yield to maturity).
• B) multiplied by (-1 × Change in the yield to maturity) equals the approximate percentage change in a bond's price.
• C) will be the same for any bonds that have equal times to maturity.
• D) only applies to pure discount securities.
• E) must be converted to a Macaulay duration before computing the percentage change in a bond's price.

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Definitions:

Poverty Line

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Basic Subsistence

The minimum resources necessary for maintaining the basic levels of living including food, shelter, and clothing.

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The national government of a federal country, which holds the ultimate authority over matters that affect the country as a whole.

Homeless

The state of lacking stable, permanent, and appropriate housing, resulting in living on the streets, shelters, or in temporary accommodations.