Multiple Choice Questions on Macaulay Duration in case of Bonds is ........ for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

Macaulay Duration in case of Bonds is ........

Finance (Phase -I & II) Valuation of Securities
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     Macaulay Duration in case of Bonds is:
     
    The period when an average bond holder would have lost his capital investment
     
    Incorrect Answer
    The period when an average bond holder would have cover/ received exactly his capital investment in form of principle and interest payment.
     
    Correct Answer
    The period when an average bond holder would have received 3 times his capital investment
     
    Incorrect Answer

     The period when an average bond holder would have received 2 times his capital investment

    Incorrect Answer
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    Explanation:
     The Macaulay duration is the weighted average term to maturity of the cash flows from the bonds. The weight of each cash flow is determined by dividing the present value of cash flow by price.
     

    By: Vikas Goyal
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