Consider a Bond with a Duration of 8 Years Having

question 31

Multiple Choice

Consider a bond with a duration of 8 years having a yield to maturity of 8 percent, and interest rates are expected to rise by 50 basis points. What is the percentage change in the price of the bond?

• A) 3.85 percent
• B) 3.45 percent
• C) -4.02 percent
• D) -3.45 percent
• E) -3.85 percent

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Definitions:

Butan-1-Ol

An alcohol with the chemical formula C4H9OH, represented by a four-carbon chain with the -OH group attached to the first carbon.

Decan-1-Ol

An organic compound and a fatty alcohol, consisting of a ten carbon chain terminating in a hydroxyl group.

IUPAC Name

The IUPAC Name refers to the systematic naming convention for chemical compounds as designated by the International Union of Pure and Applied Chemistry.

Hydrophilic

Having an affinity for water; capable of interacting with or dissolving in water.