📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    The approximate percentage change in a bond’s price

    for a 1% change in yield to maturity is given by:
    A Macaulay Duration Correct Answer Incorrect Answer
    B Modified Duration Correct Answer Incorrect Answer
    C Convexity Correct Answer Incorrect Answer
    D Approximate Duration Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Modified Duration provides the approximate percentage change in a bond’s price for a 1% change in yield to maturity. The Macaulay Duration of a bond is a weighted number of periods until the cash flows are to received.

    Practice Next
    More Banking System in India Questions
    ask-question