9-89 Use the Duration Model to Approximate the Change in the Market

question 17

Multiple Choice

9-89 Use the duration model to approximate the change in the market value (per $100 face value) of two-year loans if interest rates increase by 100 basis points.

• A)-$1.756.
• B)-$1.775.
• C)+$98.24.
• D)-$1.000.
• E)+$1.924.

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Definitions:

Equitable Allocation

It refers to the fair and impartial distribution of resources or benefits among parties in a given context.

Share Of Profits

The portion of a company's earnings allocated to each share of common stock, indicating the financial benefit for shareholders.

Coalition Building

The process of bringing together diverse groups or individuals with a common interest to form a coalition or alliance to achieve shared objectives.

Opponents

Individuals, groups, or entities that are on opposing sides in a competition, conflict, or negotiation.