Par Value Bond XYZ Has a Modified Duration of 6

question 25

Multiple Choice

Par value bond XYZ has a modified duration of 6.Which one of the following statements regarding the bond is true?

• A) If the market yield increases by 1% the bond's price will decrease by $60.
• B) If the market yield increases by 1% the bond's price will increase by $50.
• C) If the market yield increases by 1% the bond's price will decrease by $50.
• D) If the market yield decreases by 1% the bond's price will increase by $60.
• E) None of these.

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