- CFA Exams
- CFA Level I Exam
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return
- Subject 3. Properties of Bond Duration
CFA Practice Question
As times passes during a coupon period, the Macaulay duration ______ and then ______ after the coupon is paid.
A. remains the same; drops sharply
B. declines smoothly; jumps upward
C. rises smoothly; drops sharply
Explanation: During a coupon period, Macaulay duration and modified durations decline smoothly in a "saw-tooth" pattern. They jump up on the coupon payment date.
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