Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 7 of 24
The Macaulay duration is ______ the modified duration in estimating duration for bonds with embedded options ______.
B. superior to; it does consider changing cash flows
C. equal to; because they both consider changing cash flows
D. equal to; because neither consider changing cash flows
A. weaker than; it does not consider changing cash flows
B. superior to; it does consider changing cash flows
C. equal to; because they both consider changing cash flows
D. equal to; because neither consider changing cash flows
User Contributed Comments 6
| User | Comment |
|---|---|
| harpalani | Why D? |
| johntan1979 | Why this why that... read the notes, dude. |
| enetis | burn |
| dojoe | rude |
| dbedford | D because Macaulay and Modified operate around a fixed idea of CF. |
| sshetty2 | see effective duration |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
explain why effective duration and effective convexity are the most appropriate measures of interest rate risk for bonds with embedded options
calculate the percentage price change of a bond for a specified change in benchmark yield, given the bond's effective duration and convexity
CFA® 2024 Level I Curriculum, Volume 4, Module 13.