Chapter 3 Impact of Financing on Investment Decisions and ...

In this case, the PV of cash flows in the future will rise if the yield falls, extending the point of balance, therefore lengthening the duration. 6.4. Modified duration (Jun 11, Pilot 13, Jun 14) 6.4.1 Modified duration is a . measure. of the . sensitivity of the price. of a bond . to a change in interest rates. 6.4.2 Formula… ................
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