|
An investor gathered the following information on two U.S. corporate bonds:
- Bond J is callable with maturity of 5 years
- Bond J has a par value of $10,000
- Bond M is option-free with a maturity of 5 years
- Bond M has a par value of $1,000
For each bond, which duration calculation should be applied?
A.
| Effective Duration |
Modified Duration or Effective Duration |
B.
| Modified Duration |
Effective Duration only |
C.
| Effective Duration |
Effective Duration only |
|
