A Bond Is Currently Trading for 98

question 20

Multiple Choice

a bond is currently trading for 98.722 per 100 of par value. if the bond's yield-to-matu- rity (YtM) rises by 10 basis points, the bond's full price is expected to fall to 98.669. if The bond's YtM decreases by 10 basis points, the bond's full price is expected to increase To 98.782. The bond's approximate convexity is closest to:

• A) 0.071.
• B) 70.906.
• C) 1,144.628.

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Definitions:

Year-end

The end of a fiscal year or calendar year, when companies close their books and summarize financial activities.

Eliminate Intra-entity Transfer

A consolidation procedure that removes transactions between entities within the same corporate group to avoid double counting in consolidated financial statements.

Equity Method

An accounting technique used to assess the profits earned by a company through its investment in another company, by reporting the income based on the investee's net income and changes in equity.

Eliminate Unrecognized

A process in accounting to remove unrealized gains or losses from the books, often in the context of consolidation accounting to avoid double counting.