If a Bond's Volatility Is 10

question 49

Multiple Choice

If a bond's volatility is 10.00% and the interest rate goes down by 0.75% (points) ,then the price of the bond:

• A)decreases by 10%
• B)decreases by 7.5%
• C)increases by 7.5%
• D)increases by 0.75%

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Definitions:

Departments

Distinct areas or divisions within an organization, each dedicated to a specific function or purpose.

Dollar Gross Profit

The total amount of money a company makes after subtracting the costs directly associated with producing its goods or services.

Net Sales

The amount of sales revenue left after deducting sales returns, allowances, and discounts from the total gross sales.

Cost of Goods Sold

An expense measured as the total direct costs attributable to the production of goods sold by a company.