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Basic Question 0 of 15
The difference between modified duration and effective duration is that ______
B. modified duration calculates the duration based on different interest rate adjustments while the effective duration does not.
C. effective duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the modified duration does not.
D. modified duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the effective duration does not.
A. effective duration calculates the duration based on different interest rate adjustments while modified duration does not.
B. modified duration calculates the duration based on different interest rate adjustments while the effective duration does not.
C. effective duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the modified duration does not.
D. modified duration calculates the price estimates used in duration based on the possible varying cash flows at different interest rates while the effective duration does not.
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I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
define forward contracts, futures contracts, swaps, options (calls and puts), and credit derivatives and compare their basic characteristics
CFA® 2026 Level I Curriculum, Volume 5, Module 2.