What Effect Would a 100 Basis Point Drop in Yield

question 101

Multiple Choice

What effect would a 100 basis point drop in yield have on bond prices?

• A)It would have a larger impact on bond prices when yields are high.
• B)It would have a larger impact on bond prices when yields are low.
• C)It would have the same impact on bond prices regardless of whether yields are high or low.
• D)It would cause bond prices to fall in general.

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