If a Bond's Volatility Is 10

question 53

Multiple Choice

If a bond's volatility is 10.00 percent and the interest rate goes down by 0.75 percent (points) , then the price of the bond

• A)decreases by 10.00 percent.
• B)decreases by 7.50 percent.
• C)increases by 7.50 percent.
• D)increases by 0.75 percent.

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Definitions:

Clarity

The quality of being easily understood, completely transparent, and free from ambiguity.

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The process of putting a decision or plan into effect, executing or enacting it within a defined timeframe or context.