Which of the Following Is NOT True with Respect to Duration

question 8

Multiple Choice

Which of the following is NOT true with respect to duration?

• A) All else constant,the larger is the bond's maturity,the smaller is the bond's duration.
• B) Duration has an interpretation of the bond's average life.
• C) Duration can be used to approximate the bond's price change when yields change.
• D) The duration of a zero-coupon bond is the maturity of the bond.
• E) Modified duration is the duration divided by (1 + y)where y is the bond's yield.

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