An 8%, 15-Year Bond Has a Yield to Maturity of 10

question 63

Multiple Choice

An 8%, 15-year bond has a yield to maturity of 10% and duration of 8.05 years. If the market yield changes by 25 basis points, how much change will there be in the bond's price?

• A) 1.83%
• B) 2.01%
• C) 3.27%
• D) 6.44%

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Definitions:

Unemployed

Individuals who are actively seeking employment but are unable to find work.

Construction Worker

An individual who works in the construction industry, engaging in physical labor to build, maintain, or repair buildings, roads, and other structures.

Welfare

Programs and policies designed to help individuals and families in need, usually provided by the government.

Stagflation

A situation in the economy characterized by slow growth and high unemployment coupled with high inflation.