1. Which of the following statements is FALSE? 1. Duration represents the holding period at which reinvestment and price risks will exactly offset one another. 2. Duration is the point of tangency or slope of a straight line drawn along the price yield curve. 3. (Modified) Duration can be used to provide a curvilinear estimate of the dollar price change, for a given yield change.
2. True or False: The slope of the Price – Yield Curve is constant.