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2. Which of the following statements about modified duration is FALSE ? A. Estimating the change in price of a bond using modified duration is
2. | Which of the following statements about modified duration is FALSE? | ||||||||||||
A. Estimating the change in price of a bond using modified duration is accurate only for small changes in yield-in-maturity | |||||||||||||
B. A bond's modified duration enables you to estimate the change in the bond's price for a given change in yield-to-maturity | |||||||||||||
C. For a large change in yield-to-maturity, an estimation of the bond's price change based only on modified duration is subject to error | |||||||||||||
D. Modified duration measures the non-linear changes in the bond's price due to changes in yield-to-maturity | |||||||||||||
E. Modified duration is essentially the slope of the price-yield curve for a bond | |||||||||||||
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