You Have a 15 Year Maturity 4% Coupon,6% Yield Bond

question 65

Multiple Choice

You have a 15 year maturity 4% coupon,6% yield bond with duration of 10.5 years and a convexity of 128.75.The bond is currently priced at $805.76.If interest rate were to increase 200 basis points your predicted new price for the bond (including convexity) is _________.

• A) $638.85
• B) $642.54
• C) $666.88
• D) $705.03

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Definitions:

Assets Abroad

Investments or capital holdings a country or individual has in foreign countries, including real estate, stocks, bonds, and other financial assets.

Financial Transactions

Activities involving the exchange of money or assets between parties, which can include investments, loans, purchases, and sales.

Real Assets

Assets that have intrinsic value due to their substance and physical properties, such as real estate, commodities, or natural resources.

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net earnings on investments, and transfer payments.