alleryStart learning →Fisher-Weil duration discounts each cash flow at which rate?
AIts own spot rate
BThe yield to maturity
CThe coupon rate
DRisk-free rate only
Answer & Solution
Correct answer: A. Its own spot rate
It uses the zero-coupon rate for each payment's maturity instead of a single yield.
Keep practising Asset Allocation
Browse all Asset Allocation questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
In UK gilt market guides, modified duration is often called what?What does key rate duration capture that ordinary duration does not?Which feature produces negative convexity in a bond?Effective duration is used for securities such as callable bonds because their what changeDuration alone becomes less accurate as the yield change does what?What improves a duration estimate when yields change by a large amount?What does DV01 express?A portfolio holds equal present values in bonds of duration 4 and 8. What is portfolio dur