Class a Balances Have a Sensitivity Requirement of

question 28

Multiple Choice

Class A balances have a sensitivity requirement of

• A) 1 mg
• B) 2 mg
• C) 3 mg
• D) 6 mg

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Definitions:

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, usually expressed in years.

Bond Duration

A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years.

Time To Maturity

The remaining duration until the expiration date of a financial instrument, when its principal is due to be paid to holders.