Answer-Which of the following is not true about Duration?

All the above statements are true.

Question

Which of the following is not true about

Duration?

A Duration is dynamic and keeps changing with market yield

B Duration of a coupon paying bond is less than maturity because when some cash-flow is received prior to maturity, the weightage of the terminal cash flow cannot be one.

C Modified duration provides a measure of percentage change in price, for a percentage change in yield

D Duration is the first derivative of the price-yield curve

E None of the above

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Solution