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Basic Question 0 of 10
The difference between modified duration and effective duration is that ______
B. modified duration calculates the duration based on different interest rate adjustments while the effective duration does not.
C. effective duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the modified duration does not.
D. modified duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the effective duration does not.
A. effective duration calculates the duration based on different interest rate adjustments while modified duration does not.
B. modified duration calculates the duration based on different interest rate adjustments while the effective duration does not.
C. effective duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the modified duration does not.
D. modified duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the effective duration does not.
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Learning Outcome Statements
describe the relationships among a bond's holding period return, its Macaulay duration, and the investment horizon
define, calculate, and interpret Macaulay duration
CFA® 2025 Level I Curriculum, Volume 4, Module 10.