- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 11. Yield-Based Bond Duration Measures and Properties
- Subject 3. Properties of Bond Duration
CFA Practice Question
The relationship between modified duration and Macaulay duration is ______
B. the Macaulay duration is the modified duration divided by (1+ yield/k).
C. that the modified duration is always greater than the Macaulay duration.
A. the modified duration is the Macaulay duration divided by (1+ yield/k).
B. the Macaulay duration is the modified duration divided by (1+ yield/k).
C. that the modified duration is always greater than the Macaulay duration.
Correct Answer: A
User Contributed Comments 1
| User | Comment |
|---|---|
| Kennyk11 | The modified duration will always be less than the Macaulay duration, except for the case when the yield is 0, in which case the Modified Duration will equal the Macaulay duration. Ex. If r=0 Modified Duration = Macaulay Duration / (1+0) = Macaulay Duration |