Asked by Martin hubs-boy on May 12, 2024
Verified
A bond has a maturity of 12 years and a duration of 9.5 years at a promised yield rate of 8%. What is the bond's modified duration?
A) 12 years
B) 11.1 years
C) 9.5 years
D) 8.8 years
Modified Duration
A measure of the sensitivity of a bond's price to changes in interest rates, modified to account for changes in cash flow schedules.
- Absorb the intricacies and ramifications of bond duration and modified duration evaluation.
Verified Answer
VD
Learning Objectives
- Absorb the intricacies and ramifications of bond duration and modified duration evaluation.