Which of the following measures the sensitivity of an asset's price to interest rate movements, expressed as a number of years?

Question

Quizplus · Accepted Answer

Duration is a measure of the sensitivity of an asset's price to changes in interest rates. It is expressed in years and takes into account the timing and size of cash flows. Longer-duration assets are more sensitive to interest rate changes than shorter-duration assets.

Which of the Following Measures the Sensitivity of an Asset's