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:

Cost Ledger

A subsidiary ledger containing all cost-related information, including direct and indirect costs ledgers, for a company.

Service Business

A business model focused on delivering non-physical products or services to its consumers.

Overhead

The indirect costs or expenses associated with operating a business, including administrative, office, and rented space expenses.

Materials Ledger

A record of the quantity and value of materials on hand, received, and issued during a period.