Par Value Bond F Has a Modified Duration of 9

question 45

Multiple Choice

Par value bond F has a modified duration of 9.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 $90.
• B) If the market yield increases by 1% the bond's price will increase by $90.
• C) If the market yield increases by 1% the bond's price will decrease by $60.
• D) If the market yield decreases by 1% the bond's price will increase by $60.
• E) None of these is true.

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Definitions:

Imine

A functional group or compound featuring a carbon-nitrogen double bond, often formed by the condensation of an aldehyde or ketone with an amine.

Racemizes

Refers to the process of converting an optically active compound into a racemic mixture, meaning a blend of equal amounts of enantiomers.

Esterifies

The process by which an ester is formed, usually from the reaction between an acid and an alcohol with the elimination of water.

Hydrolyzes

Refers to the chemical process where water is used to break down a compound, often a polymer, into smaller units.