If a Bond's Volatility Is 5

question 7

Multiple Choice

If a bond's volatility is 5.0 percent and its yield to maturity changes by 0.5 percent (points) , then the price of the bond

• A)changes by 5.0 percent.
• B)changes by 2.5 percent.
• C)changes by 7.5 percent.
• D)will not change.

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Definitions:

Time Horizon

The length of time over which an individual, group, or organization views or plans for future events.

Controlling

The managerial process of monitoring performance, comparing it with goals, and taking corrective action as needed.

Organization's Vision

A strategic declaration that describes the future state or ultimate goal an organization aims to achieve, guiding its direction and decision-making.

Functional Plans

Plans that indicate how different operations within the organization will help advance the overall strategy.