The modified duration is defined as:
A)duration multiplied by (1 + R)
B)duration divided by (1 + R)
C)duration minus (1 + R)
D)duration plus (1 + R)

Name: The modified duration is defined as: A)duration multiplied by (1 + R) B)duration divided by (1 + R) C)duration minus (1 + R) D)duration plus (1 + R)
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Question

Quizplus · Accepted Answer

Modified duration is a measure of a bond's sensitivity to interest rate changes, calculated as the bond's duration divided by (1 + the periodic interest rate).

The Modified Duration Is Defined As