Duration which is divided by interest rate plus one is classified as?

Question

Duration which is divided by interest rate plus one is classified as?

decreased duration
increase duration
modified duration
at par duration

LohaHridoy

4 views

2025-01-04 04:42

1 Answers

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AhmedNazir · Accepted Answer · 2022-09-01T13:21:41+06:00

Answer: Option 3

Duration which is divided by interest rate plus one is classified as modified duration. Modified duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Modified duration follows the concept that interest rates and bond prices move in opposite directions.