Duration which is divided by interest rate plus one is classified as
A. decreased duration
B. increase duration
C. modified duration
D. at par duration
Answer: Option C
Solution(By Examveda Team)
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.Related Questions on International Finance and Treasury
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