Two investors, Drew and Sidney, are investing in fixed income assets. Drew has a fixed income portfolio worth $5000 with a modified duration of 10 years. Sidney has a fixed income asset portfolio worth $12,000 with a modified duration of 5 years. Modified duration refers to D 1+y where D is duration and y is the yield to maturity. Interest rates at all maturities jumped up by .05% today. 

True/False/Uncertain: Drew's net worth must have dropped more as a result. Please explain why it is true/false/uncertain.

Answer rating: 100% (QA)

Modified Duration Modified duration is a measure of a bond or fixed income portfolios sensitivity to ... View the full answer