Modified Duration in Semi-Annual periods converted to Annual
By A Mystery Man Writer
Description
Why is it that to convert a Semi-Annual Modified Duration to an Annual one, we divide by 2 instead of multiplying by 2? Surely it doesn’t imply that the bond price will move more in half a year than in one full year when interest rates shift?
![Modified Duration in Semi-Annual periods converted to Annual](https://www.investopedia.com/thmb/nibgx12_T3BfaO2rBlwvFw5KdWg=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/dotdash_final_How_To_Convert_Value_At_Risk_To_Different_Time_Periods_Dec_2020-01-1a98d3db75024bbdac410a3be7185859.jpg)
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![Modified Duration in Semi-Annual periods converted to Annual](https://fundsnetservices.com/wp-content/uploads/modified-duration.jpg)
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![Modified Duration in Semi-Annual periods converted to Annual](https://cdn.educba.com/academy/wp-content/uploads/2020/02/Modified-Duration-2.png)
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![Modified Duration in Semi-Annual periods converted to Annual](https://cdn.educba.com/academy/wp-content/uploads/2019/12/Modified-Duration-Formula.jpg)
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![Modified Duration in Semi-Annual periods converted to Annual](https://media.wallstreetprep.com/uploads/2021/07/07110001/MYC-Period.jpg)
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What is the nominal rate which if converted quarterly could be used instead of 8% compounded semi-annually? - Quora
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