CAIIB Paper 2: Bank Financial Management (BFM)

Q: In Treasury Bond Portfolio management, "Modified Duration" measures:

Correct Answer: Option B (The percentage change in a bond price for a 100 basis point (1%) change in yield). Modified Duration (MD = Macaulay Duration / (1 + Yield/n)) quantifies the price sensitivity of a bond to interest rate fluctuations, indicating the percentage price shift per 1% change in yield.

1 Questions (Mod C) 4 Modules

Practice CAIIB Paper 2: Bank Financial Management (BFM) - Module C (Treasury Management) multiple choice questions with detailed step-by-step explanations.

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