A Bond Has a Modified Duration of 5

question 32

Multiple Choice

A bond has a modified duration of 5.87 years,a par value of $1,000,and a current market value of $1,008.What is the dollar value of an 01?

• A) $0.0698
• B) $0.0700
• C) $0.5917
• D) $0.6401
• E) $0.7023

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Definitions:

Categorical Data

Data that represent characteristics and can be divided into groups or categories, which are not numerically quantifiable.

Ordinal Data

Refers to a type of data which is categorized into ordered levels but the differences between the levels are not necessarily consistent or measurable.

Interval Data

A type of data that not only categorizes variables but also quantifies the differences between these categories, where the intervals between values are interpretable.

Ratio Data

A type of quantitative data that not only offers order and equal intervals between values but also has a natural zero point, enabling ratios to be calculated.