An 8%,30-Year Bond Has a Yield-To-Maturity of 10% and a Modified

question 43

Multiple Choice

An 8%,30-year bond has a yield-to-maturity of 10% and a modified duration of 8.0 years.If the market yield drops by 15 basis points,there will be a __________ in the bond's price.

• A) 1.15% decrease
• B) 1.20% increase
• C) 1.53% increase
• D) 2.43% decrease

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Definitions:

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