Effective vs Modified Duration
Hi, there might be a small but mighty error in the webpage under Effective Duration - eff duration is where interest rate DO affect future cash flows. I'm getting confused haha. Battle Cards is correct. Thanks!
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Hi, there might be a small but mighty error in the webpage under Effective Duration - eff duration is where interest rate DO affect future cash flows. I'm getting confused haha. Battle Cards is correct. Thanks!
Comments
I do not see what you are looking at. the closest is his section "The effective duration is harder to calculate, but it gives a similar answer to the modified duration when interest rate changes DO NOT AFFECT future cash flows" Which is a correct statement?
Sorry my mistake, I read that too fast and thought the "DO NOT AFFECT" is giving a definition to the effective duration
All good