For a bond, Macaulay duration represents the time period where:
A) duration equals convexity.
B) reinvestment risk equals price risk.
C) time to maturity equals investment horizon.
D) the coupon rate equals the required return.

Question

Quizplus · Accepted Answer

Macaulay duration is the weighted average time to receive the bond's cash flows and is the point where the bond's price risk and reinvestment risk offset each other.

For a Bond, Macaulay Duration Represents the Time Period Where