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Basic Question 0 of 16

The difference between modified duration and effective duration is that ______

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

explain the financial reporting of leases from the perspectives of lessors and lessees

CFA® 2025 Level I Curriculum, Volume 2, Module 8.