Thanks heaps for the lecture. Just wondering, with previous lecture we have example one showing the interest (yield) changed from 10% to 15%, and the market value changed by 17.4% respectively. When I used the modified duration 3.94*change in yields (5%)=19.7%, which is different from 17.4%. Could you please kindly explain why it would be the case?

Thanks for these lectures Sir. But you define the Macaulay Duration as “the avg time taken to return half our money” ,while on the internet and in an older text that i have it says ” the avg time taken to return the present value of cash flows of a project”

Even in the lecture notes it mentions ” The avg time taken by a bond to repay the principal and interest amounts”.

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jocelynjm says

Hi John,

Thanks heaps for the lecture.

Just wondering, with previous lecture we have example one showing the interest (yield) changed from 10% to 15%, and the market value changed by 17.4% respectively. When I used the modified duration 3.94*change in yields (5%)=19.7%, which is different from 17.4%. Could you please kindly explain why it would be the case?

Many thanks!

claudia1 says

Thank you for the lectures Sir……just a tiny error in calculating the macaulay duration.Discount factor .826 and not .822.

ab619 says

Thanks for these lectures Sir. But you define the Macaulay Duration as “the avg time taken to return half our money” ,while on the internet and in an older text that i have it says ” the avg time taken to return the present value of cash flows of a project”

Even in the lecture notes it mentions ” The avg time taken by a bond to repay the principal and interest amounts”.

So can you please clarify this doubt?

Thank You

4tcube says

Can I calculate the Macaulay duration if I have used Annuity to calculate the yield?

John Moffat says

I don’t know what you mean by ‘used annuity to calculate the yield’.

adlin says

no you can’t…that’s why pv are calculated separately