If a Bond's Volatility Is 10% and the Interest Rate

question 50

Multiple Choice

If a bond's volatility is 10% and the interest rate goes down by 0.75% (points) then the price of the bond:

• A) decreases by 10%
• B) decreases by 7.5%
• C) increases by 7.5%
• D) increases by 0.75%

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Definitions:

Media

The main means of mass communication, including broadcasting, publishing, and the internet, used for disseminating information and entertainment.

Using Media

The act of engaging with various forms of media for information, entertainment, education, or communication purposes.

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