A Bond Has an Annual Modified Duration of 7

question 27

Multiple Choice

a bond has an annual modified duration of 7.020 and annual convexity of 65.180. if the bond's yield-to-maturity decreases by 25 basis points, the expected percentage price Change is closest to:

• A) 1.73%.
• B) 1.76%.
• C) 1.78%.

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Definitions:

Conditional Claim

A statement that asserts something is true if, and only if, another condition is met.

Conditional Claim

A statement that asserts the truth of something based on a condition being met or a hypothesis being true.

Valid Argument

An argument whose conclusion logically follows from its premises, ensuring that if the premises are true, the conclusion must also be true.

Conclusion

The final part of something, such as an argument or piece of writing, summarizing the main points and often expressing a final judgment or decision.