Consider a Bond with a Duration of 6 Years Having

question 16

Multiple Choice

Consider a bond with a duration of 6 years having a yield to maturity of 8% and interest rates are expected to rise by 50 basis points.What is the percentage change in the price of the bond?

• A) 2.88%
• B) 3.45%
• C) -3.89%
• D) -3.45%
• E) -2.88%

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Definitions:

Chief Financial Officers

Senior executives responsible for managing the financial actions of a company, including financial planning, risk management, and reporting.

Certify Accuracy

To officially affirm or validate the truthfulness and correctness of information or data.

Sarbanes-Oxley Act

A federal law established in the United States in 2002 that aims to safeguard investors through the enhancement of the precision and dependability of company reports.

Outside Directors

Board members who are not part of the company's day-to-day operations, providing independent oversight and insight.