An Increase in a Bond's Yield to Maturity Results in a Price

question 25

Multiple Choice

An increase in a bond's yield to maturity results in a price decline that is ________ the price increase resulting from a decrease in yield of equal magnitude.

• A)greater than
• B)equivalent to
• C)smaller than
• D)The answer is uncertain

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Definitions:

Probability Distribution

A function in mathematics that offers the chances of various outcomes happening in an experiment.

Average Profit

The mean amount of profit earned, calculated by dividing the total profit by the number of units sold or the period over which the profit was earned.

Weight Gain

An increase in body weight, which can be due to muscle mass increase, fat accumulation, or other factors.

Probability Distribution

A mathematical description of the likelihood of different outcomes in an experiment, showing how probabilities are distributed over a range of values.