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:

Constitution

The fundamental set of laws and principles that outlines the government structure, rights of citizens, and powers of the state within a country.

Reconstruction

The period from 1865-1877 following the American Civil War, during which the Southern states were reorganized and reintegrated into the Union.

Waving the Bloody Shirt

A phrase that originated in the post-Civil War era representing the use of war memories or martyrs to galvanize public opinion or garner support, typically for political purposes.

Ku Klux Klan

A white supremacist group founded in the 19th century that advocates for white dominance and has historically used terrorism to achieve its goals.