Dollar Duration

CFA Level I
#1

I get confused between effective Duration and dollar duration… the p(0) is same for both?? Bps for dollar duratiom lets say if it is 50 - then we have to multiply by 0.01?

#2

i dont know but i’d bet dollar duration is just duration times price of bond. effective duration = % change dollar duration = dollar change

#3

anyone??/

#4

Dollar Duration = Duration × 1% × current market price

#5

Dollar Duration is Modified Duration x Price Effective Duration is a measure used with bonds that have embedded options.

#6

DOLLAR IS EASY, IT IS MODIFIED D * PRICE. THEY WILL GIVE YOU DURATION LIKE “5” THAT MEANS 5% TIMES THE PRICE MOD DURASTION = CHANGE IN PRICE DUE TO CHANGE IN RATES md = V(-) - V(+)/(2 * Vo * change in bps) boom!