A. decreased duration
B. increase duration
C. modified duration
D. at par duration
✅ The correct answer is option C.
Duration which is divided by interest rate plus one is classified as modified duration. Modified duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Modified duration follows the concept that interest rates and bond prices move in opposite directions.
Duration which is divided by interest rate plus one is classified as modified duration. Modified duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Modified duration follows the concept that interest rates and bond prices move in opposite directions.