The most important difference between effective duration and Macaulay duration for a mortgage passthrough security is that:

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a. Macaulay duration is easier to calculate.

b. Effective duration is easier to calculate.

c. Macaulay duration accounts for prepayment sensitivity.

d. Effective duration accounts for prepayment sensitivity.

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Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

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Question Posted: Jan 02, 2024 05:43 AM

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The most important difference between effective duration and Macaulay duration for a mortgage passthrough security is that:

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The correct answer is d Effective duration accounts for prepayment sensitivity ...View the full answer

Fundamentals Of Investments Valuation And Management

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