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Question
Which one of the following is the reason that Macaulay duration is NOT a good measure of interest rate risk for mortgage bonds?A. Mortgage bonds are long-term securities while Macaulay duration is a short-term measure.
B. Macaulay duration assumes the debt has a variable rate and most mortgages have a fixed rate.
C. Macaulay duration requires bond payments to be made semi-annually.
D. Macaulay duration assumes payments are fixed and mortgage bond payments vary.
E. Macaulay duration only applies to zero-coupon bonds.
Answer
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Related questions
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Q:
Which one of the following statements regarding an original issue $25,000 GNMA bond is correct?
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Q:
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Q:
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Q:
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Q:
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Q:
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Q:
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