Consider a Security with a Duration of 2

question 41

Multiple Choice

Consider a security with a duration of 2.78 years. The current interest rate level is 10 per cent p.a. How does the price of the security change if interest rates decrease by 100 basis points (round to two decimals) ?

• A) The price of the security will decrease by 1 per cent.
• B) The price of the security will increase by 1 per cent.
• C) The price of the security will decrease by 2.50 per cent.
• D) The price of the security will increase by 2.50 per cent.

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Definitions:

Divorce Rates

The statistical measure indicating the number of divorces occurring among the population within a given time period.

Economic Survival

The ability of an individual, household, or entity to maintain sufficient income or resources to support its livelihood and meet basic needs.

Equality In Relationship

A state of being equal in rights, responsibilities, and opportunities within interpersonal relationships, promoting fairness and mutual respect.

Career Interest

Refers to the specific professions or fields a person feels drawn to or passionate about pursuing.