Modulation ratio is a widely-used and important index for power converters, which is related with the circuit parameter selection, the converter transformer tap changing, the control scheme design, and so on. However, this paper found that the traditional definition of modulation ratio cannot be applied to Modular Multilevel Converters (MMC), because it is derived based on three unacceptable simplifications, and fails to describe the characteristics of modulation signals. Then, a new concept is proposed in this paper: Dynamic Modulation Ratio (DMR). Comparing with the traditional modulation ratio, the value of DRM can dynamically change according to the variation of operating conditions. Thereupon, the widely-used and newly-proposed definitions of modulation ratio are comprehensively studied under various operating conditions. It is concluded that, in the MMC, the traditional definition of modulation ratio is only accurate under a few situations; in contrast, the DRM can accurately reflect the characteristics of modulation signals under all situations. Finally, the analyses and conclusions are verified in the Zhangbei HVDC project in China based on the RT-Lab platform.