Dollar duration of a fixed-income security is defined as
A)the dollar value change in the price of a security to a one-percent change in the return on the security.
B)the dollar value change in the price of a security to a change in the Macaulay's duration of the security.
C)the market price of a security following a one-percent change in the return on the security.
D)Macaulay's duration divided by one plus the interest rate times the market price of the security.

Question

Quizplus · Accepted Answer

Dollar duration is a measure of the sensitivity of the price of a fixed-income security to changes in interest rates. It measures the dollar value change in the price of a security to a one-percent change in the yield (or return) on the security.

Dollar Duration of a Fixed-Income Security Is Defined as