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Basic Question 8 of 10
If an investor's investment horizon is shorter than the Macaulay duration of a traditional (option-free) coupon bond,
B. market risk will dominate.
C. coupon reinvestment risk and market risk will offset each other.
A. coupon reinvestment risk will dominate.
B. market risk will dominate.
C. coupon reinvestment risk and market risk will offset each other.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
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® 2024 Level I Curriculum, Volume 4, Module 10.