You Own a Bond That Has a Duration of 6

question 12

Multiple Choice

You own a bond that has a duration of 6 years. Interest rates are currently 7% but you believe the Reserve Bank is about to increase interest rates by 25 basis points. Your predicted price change on this bond is ________.

• A)+1.40%
• B)-1.40%
• C)-2.51%
• D)+2.51%

---

Definitions:

Sister Groups

The two lineages that emerge from a node on a cladogram.

Hardy-Weinberg Equation

A principle used in genetics to calculate the frequency of alleles and genotypes in a population's gene pool under ideal conditions.

Recessive Allele

An allele that only expresses its phenotype when two copies are present, as opposed to when a dominant allele is present.

Derived Trait

An evolved feature that distinguishes a species from its ancestors, arising during the species' history.