CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

The Macaulay duration is ______ the modified duration in estimating duration for bonds with embedded options ______.

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
Correct Answer: D

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
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