With a Four-Year Bond of Face Value $1000 Paying an Annual

question 27

Multiple Choice

With a four-year bond of face value $1000 paying an annual coupon of 6%,if current market yields of 6% change to 7%:

• A) its duration will increase.
• B) the duration price formula will underestimate the change in price.
• C) the duration price formula will overestimate the change in price.
• D) its duration will decrease.

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Definitions:

Data Collection

The process of gathering and measuring information on variables of interest in a systematic fashion.

Child Development

The study of how children grow and change physically, cognitively, emotionally, and socially from birth through adolescence.

Full Potential

The highest or greatest level of performance, ability, or achievement one is capable of reaching.

Childhood Development

The physiological, psychological, and emotional changes that occur in humans between birth and the end of adolescence.