A 7%, 14-Year Bond Has a Yield to Maturity of 6

question 73

Multiple Choice

A 7%, 14-year bond has a yield to maturity of 6% and duration of 7 years. If the market yield changes by 44 basis points, how much change will there be in the bond's price?

• A) 1.85%
• B) 2.91%
• C) 3.27%
• D) 6.44%

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Definitions:

Unanimous House Vote

A vote in which all present members of a legislative house, such as the House of Representatives, agree on a particular decision or piece of legislation.

Policy of Appeasement

A diplomatic strategy aimed at avoiding conflict by making concessions to an aggressive country or leader.

Germany's Aggressive Moves

Actions taken by Germany, particularly in the early 20th century, that were seen as hostile or expansionist, leading up to both World War I and World War II.

Munich Accord

An agreement reached in 1938 among Germany, Great Britain, France, and Italy that allowed Nazi Germany to annex part of Czechoslovakia in an attempt to appease Hitler and avoid war.