A Bond with Duration of 5

question 19

Multiple Choice

A bond with duration of 5.7 years has a yield to maturity of 9 percent. The bond's volatility (modified duration) is

• A)1.9 percent.
• B)5.2 percent.
• C)5.7 percent.
• D)9.0 percent.

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Definitions:

Liable

Being legally responsible for something, typically involving a financial or legal obligation.

Contract

A lawful agreement among two or more parties that has legal authority and enforceability.

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for wrongful actions taken by an employee or agent if such actions occur in the course of their employment or agency.

Unauthorized Acts

Unauthorized Acts are actions taken by an individual or entity that are not permitted or sanctioned by law, contract, or authority.