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If a Bond Trader Indicates That the Yield on a Bond

question 8

Essay

If a bond trader indicates that the yield on a bond has increased by 50 basis points,
what is the percentage change in yield?


Definitions:

Trading Investments

Securities that are purchased by a firm primarily for the purpose of selling them in the near term to generate income.

Long-Term Investments

Financial assets intended to be held for more than a year, including stocks, bonds, and real estate, for generating revenue or appreciating in value over time.

Sale of Bonds

The process by which a company or government issues bonds to investors in order to raise capital, effectively borrowing from the bond purchasers.

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