CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

A bond with annual coupon payments has the following characteristics:

Coupon rate: 8%
Yield to maturity: 10%
Macaulay duration: 9

The bond's modified duration is ______.

A. 8.18
B. 8.33
C. 9.78
Correct Answer: A

9/(1+0.1) = 8.18

User Contributed Comments 7

User Comment
haarlemmer annual coupon!
tanyak ANNUAL STUPID COUPON!
wink44 Thought we didn't need to memorize that equation for the test?
anneki We can memorize one more equation.
DonAnd my sentiments exactly wink44 but it is actually an easy formula.
rvera I always think that we should assume a semi-annual coupon...but perhaps that is just me.
johntan1979 Question stated "annual".

It's a very easy formula, guys! I'm sure there's some space left in our coconuts after all those CFA curriculum and formulas :)
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