Dear all,

It has been stated in Schwesers’ Notes (" **SN**") page 88 that modified duration (" **ModDur**") is a linear estimate of the relation between bond’s price and YTM. In addition on the same page, there is a Price vs YTM graph drawn which show a convex curve and 2 straight line ( 1 at a tangent to the curve and another one that cuts through the curve).

The formula for approx modified duration is: **(V- less V+)/ (2 X Vo X change in YTM)**

**Question1: The “modified duration” refers to approx modified duration or modified duration? The formula for both are different.**

**Question 2: The formula above refers to the convex curve or the straight line? I am confused as the formula seems to be referring to the curve rather than the straight line.**

Thanks.

Cheers,

Ernest