In Estimating Price Sensitivity, the RiskMetrics Model Prefers to Use

question 26

True/False

In estimating price sensitivity, the RiskMetrics model prefers to use modified duration over the present value of cash flow changes.

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Definitions:

One-tailed Test

A statistical test in which the region of rejection is on only one side of the sampling distribution, used when testing a directional hypothesis.

Chi-square Value

A statistical measure used in the chi-square test to compare observed data with data expected to be obtained under a specific hypothesis.

One-tailed Test

A statistical test in which the region of rejection is on only one side of the sampling distribution.