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What Is the Impact of a 50 Basis Point Increase

question 24

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What is the impact of a 50 basis point increase in interest rates on the net asset value of an open-end bond mutual fund holding a seven year,$100 million face value 7 percent annual coupon bond selling at par? The fund has 10 million shares.


Definitions:

Business for Social Responsibility

An organization and movement that works with businesses to create a just and sustainable world by encouraging them to integrate social and environmental responsibility into their operations.

Dumping

The practice of selling goods in a foreign market at a price lower than their normal value, often as a means of driving out competition or disposing of surplus stock.

Anticompetitive

Practices or policies that restrict or restrain competition in a market, often considered unfair or unethical.

Bribery

The practice of offering, giving, receiving, or soliciting something of value to influence the action of an official or other person in charge of a public or legal duty.

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