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Basic Question 1 of 5
A bond with annual coupon payments has the following characteristics:
Yield to maturity: 10%
Macaulay duration: 9
B. 8.33
C. 9.78
Coupon rate: 8%
Yield to maturity: 10%
Macaulay duration: 9
The bond's modified duration is ______.
A. 8.18
B. 8.33
C. 9.78
User Contributed Comments 7
| User | Comment |
|---|---|
| haarlemmer | annual coupon! |
| tanyak | ANNUAL STUPID COUPON! |
| wink44 | Thought we didn't need to memorize that equation for the test? |
| anneki | We can memorize one more equation. |
| DonAnd | my sentiments exactly wink44 but it is actually an easy formula. |
| rvera | I always think that we should assume a semi-annual coupon...but perhaps that is just me. |
| johntan1979 | Question stated "annual". It's a very easy formula, guys! I'm sure there's some space left in our coconuts after all those CFA curriculum and formulas :) |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
define, calculate, and interpret modified duration, money duration, and the price value of a basis point (PVBP)
CFA® 2024 Level I Curriculum, Volume 4, Module 11.