The "modified duration" used by practitioners is equal to ______ divided by (one plus the bond's yield to maturity).
A) current yield
B) the Macaulay duration
C) yield to call
D) yield to maturity
E) None of the options are correct.

Question

Quizplus · Accepted Answer

The "modified duration" is calculated as the Macaulay duration divided by (1 + the bond's yield to maturity). This measure adjusts the Macaulay duration for the bond's yield to maturity, providing a more accurate measure of interest rate sensitivity.

The "Modified Duration" Used by Practitioners Is Equal to ______