A Bond Has a YTM of 6

question 16

Multiple Choice

A bond has a YTM of 6.5%, a modified duration of 16.9 years, a duration of 18 years and a 30 year maturity. By what percentage will the bond's price change if market interest rates increase by 0.75%?

• A) +12.675 percent.
• B) - 12.675 percent.
• C) +0.750 percent.
• D) - 0.750 percent.

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Definitions:

Attitude

A relatively stable evaluation of a person, object, situation, or issue, along a continuum ranging from positive to negative.

Bystander Apathy

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present.

Attitude

A settled way of thinking or feeling about something, typically reflected in a person's behavior.

Groupthink

A mental effect experienced by a collective, where the pursuit of agreement or uniformity among members leads to choices that are illogical or not functional.