The "modified duration" used by practitioners is equal to the Macaulay duration
A) times the change in interest rate.
B) times (one plus the bond's yield to maturity).
C) divided by (one minus the bond's yield to maturity).
D) divided by (one plus the bond's yield to maturity).
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Modified duration is calculated as Macaulay duration divided by (1 + bond's yield to maturity), adjusting for the change in interest rates.

The "Modified Duration" Used by Practitioners Is Equal to the Macaulay