Par Value Bond GE Has a Modified Duration of 11

question 54

Multiple Choice

Par value bond GE has a modified duration of 11.Which one of the following statements regarding the bond is true?

• A)If the market yield increases by 1% the bond's price will decrease by $55.
• B)If the market yield increases by 1% the bond's price will increase by $55.
• C)If the market yield increases by 1% the bond's price will decrease by $110.
• D)If the market yield increases by 1% the bond's price will increase by $110.
• E)None of the above.

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Definitions:

Airbag System Component

Parts of an airbag system in a vehicle designed to inflate rapidly during a collision to prevent occupants from striking the vehicle interior or being thrown from the car, enhancing passenger safety.

SRS System

Supplemental Restraint System, an automotive safety feature incorporating airbags and other components to protect passengers during a collision.

Steering Column

The shaft connecting the steering wheel to the steering mechanism of a vehicle, allowing the driver to control the direction of travel.

Collision

The event where two objects come into contact with force, often used to describe traffic accidents involving vehicles.