Question

Duration is

		A) the elasticity of a security's value to small coupon changes.
		B) the elasticity of a security's value to market interest rate changes.
		C) the time until the investor recovers the price of the bond in today's dollars
		D) higher for high coupon bonds and lower for low coupon bonds, all else being equal
		E) the second derivative of the bond price formula with respect to the YTM

Answer 1

Option B is correct

the elasticity of a security's value to market interest rate changes.

Duration shows the interest rate sensitivity of the bond price with change in interest rates.