Which of the Following Statements About Duration Is Incorrect

question 53

Multiple Choice

Which of the following statements about duration is incorrect?

• A) Duration is superior to time to maturity as a measure of price sensitivity to interest rate changes.
• B) Holding other things constant, the duration of a bond increases with time to maturity.
• C) Given time to maturity and yield to maturity, the duration of a bond is higher when the coupon rate is lower.
• D) Given time to maturity, the duration of a zero coupon bond decreases with yield to maturity.

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Definitions:

Balance

The ability to maintain the body's center of mass over its base of support, a function largely managed by the cerebellum and inner ear.

Eye Movements

The voluntary or involuntary movement of the eyes, helping in acquiring, fixating and tracking visual stimuli.

Pacinian Corpuscles

Sensory receptors found deep in the skin and other tissues that detect pressure and vibration.

Pressure

The force exerted by an object against a surface or the stress within substances influenced by external or internal forces.