An 8%, 15-Year Bond Has a Yield to Maturity of 10

question 63

Multiple Choice

An 8%, 15-year bond has a yield to maturity of 10% and duration of 8.05 years. If the market yield changes by 25 basis points, how much change will there be in the bond's price?

• A) 1.83%
• B) 2.01%
• C) 3.27%
• D) 6.44%

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Definitions:

Excise Tax

A tax on specific goods or activities, often included in the price of products like alcohol, tobacco, and gasoline, used by governments to raise revenue.

American Republic

A term referring to the United States of America, emphasizing its form of government as a republic.