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Basic Question 2 of 5

Modified duration is calculated based on measuring the interest rate sensitivity of price with ______.

A. varying cash flows and constant interest rate shocks
B. constant expected cash flows discounted at new interest rates or yields
C. price volatility measured by the varying interest rates
D. V- and V+ based on the original yield

User Contributed Comments 1

User Comment
bundy Assume that a bonds expected cash flows do not change when its yield changes.
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Craig Baugh

Craig Baugh

Learning Outcome Statements

define, calculate, and interpret modified duration, money duration, and the price value of a basis point (PVBP)

CFA® 2025 Level I Curriculum, Volume 4, Module 11.