John Owns a Bond That Has a Modified Duration of 5.29

question 59

Multiple Choice

John owns a bond that has a modified duration of 5.29 and a yield to maturity of 6.1%. If interest rates increase by 50 basis points, the bond's price will change by ________.

• A)−2.65%
• B)−.54%
• C)−.41%
• D)+.41%
• E)+2.65%

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