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Modified Duration Is Determined by Making Small Adjustments to the Macaulay

question 59

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Modified duration is determined by making small adjustments to the Macaulay duration.

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Definitions:

Null Hypothesis

In statistical hypothesis testing, a statement that there is no effect or no difference, and any observed deviation from this is due to sampling or experimental error.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, commonly denoted by alpha.

P-value

A measure in statistics that helps to determine the significance of results obtained in hypothesis testing, indicating the probability of observing the results if the null hypothesis is true.

Standard Error

The standard deviation of the sampling distribution of a statistic, usually the mean, indicating the precision of an estimate.

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