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- Subject
- Security Valuationfinance-mcqs › security-valuation
- Published
- 13 May 2023
- Last updated
- 28 May 2026
Explanation
The duration adjusted by dividing it by one plus the interest rate is known as the modified duration. This measure reflects the sensitivity of a bond's price to interest rate changes.
More Security Valuation MCQs
Practice related questions from the same subject.
- 1.Which term describes the inverse correlation between fluctuations in price and changes in interest rates?
- 2.Which term describes the direct correlation between fluctuations in price and changes in interest rates?
- 3.For zero-coupon bonds, how does the duration change as the maturity lengthens?
- 4.What is the classification of a bond whose present market value exceeds its face value?
- 5.What is the term for the interest rate that investors expect to earn on a financial asset when determining its fair value?
- 6.Which type of bond is issued without periodic interest payments?
- 7.What term describes the weighted average period until an investment matures?
- 8.What term describes the percentage change in a bond's present value resulting from a given change in interest rates?
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