Dear Tutor,
As per lec notes, "The Modified Duration measures the sensitivity of the market value of a bond to changes in interest rate". What are these interest rate? the future investor's required rate of interest, isn't it?
Ask the Tutor ACCA AFM
Modified Duration rate
7y ago#1Correct - the investors required rate of return (which is, of course, dependent on what happens to general interest rates).
Sign in to reply to this topic.