A Bond Has a Modified Duration of 7

question 48

Multiple Choice

A bond has a modified duration of 7.22 and a yield to maturity of 8.9 percent. If interest rates increase by 75 basis points, the bond's price will decrease by _____ percent.

• A) -0.46
• B) -0.54
• C) -4.60
• D) -5.42
• E) -6.18

Differentiate between normal and inferior goods based on income elasticity of demand.

Identify the factors that influence the price elasticity of supply and demand.

Analyze the impact of agricultural policies on market price and quantity.

Understand the relationship between price changes and changes in quantity demanded or supplied.

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Definitions:

Champlain

Samuel de Champlain, a French explorer known for founding New France and Quebec City in the early 17th century.

Quebec City

The capital city of the Canadian province of Quebec, known for its rich history and French heritage.

Huron Indians

A large North American Indigenous group, historically located in the Great Lakes region, known for their farming, trading, and strong societal organization.

John Rolfe

An early English settler in Virginia who is credited with the first successful cultivation of tobacco as a cash crop, which significantly influenced the colony's economy.