9-110If Yields Increase by 10 Basis Points,what Is the Approximate

question 19

Multiple Choice

9-110.If yields increase by 10 basis points,what is the approximate price change on the $100,000 Treasury note? Use the duration approximation relationship.

• A)+$188.69.
• B)+$16.05.
• C)-$1,605.05.
• D)-$16.05.
• E)+$160.51.

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Definitions:

Underlying Asset

The financial asset upon which a derivative instrument, such as an option or a futures contract, is based.

Floating-Rate Debt

Floating-rate debt is a type of loan or security that has a variable interest rate, which adjusts periodically based on a benchmark or index rate.

Market Value

The current price at which an asset or service can be bought or sold in a public market.

Historical Cost

The original financial value of an asset or investment at the time of its acquisition.