Bond Duration Sign - Quant Trader Interview Question
Difficulty: Easy
Category: Finance
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Topics: fixed-income, duration, bond, derivatives
Problem Description
Consider a standard, fixed-coupon bond. The modified duration (D) is defined as $D = \frac{1}{P} \frac{dP}{dy}$ , where P is the bond price and y is the yield to maturity.
What is the sign of the modified duration for this bond?
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