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When to use Macaulay Duration / Modified Duration / Dollar Duration?

Personal Finance & Money Asked by Eagerstudent on January 10, 2021

So I am sort of aware of how to calculate those numbers, but I am not quite sure, when to use which Duration? It’s for a corporate finance class if it matters.

Duration: determine the approximate change in price for a small change in yield

Modified: approximate percentage price change

Dollar: approximate the percentage price change for a given change
in required yield

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