Par-Value-Bond F Has a Modified Duration of 9

question 34

Multiple Choice

Par-value-bond F has a modified duration of 9. Which one of the following statements regarding the bond is true?

• A) If the market yield increases by 1%, the bond's price will decrease by $90.
• B) If the market yield increases by 1%, the bond's price will increase by $90.
• C) If the market yield increases by 1%, the bond's price will decrease by $60.
• D) If the market yield decreases by 1%, the bond's price will increase by $60.

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Definitions:

Population

The total number of individuals inhabiting a particular area or country.

Equal Distribution

The concept of distributing resources or wealth evenly across a society or group, aiming for fairness and equity.

Income

The financial gain received by an individual or a business as a return for labor, investment, or the production of goods/services.

Poverty Rate

The proportion of a population living below the poverty line, indicating the percentage of people whose income falls beneath a certain threshold necessary for basic living standards.