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Question

Which of the following is not true about Duration?

A Duration is dynamic and keeps changing with market yield Correct Answer Incorrect Answer
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. Correct Answer Incorrect Answer
C Modified duration provides a measure of percentage change in price, for a percentage change in yield Correct Answer Incorrect Answer
D Duration is the first derivative of the price-yield curve Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

All the above statements are true.

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