Consider a Bond with a Duration of 7 Years Having

question 104

Multiple Choice

Consider a bond with a duration of 7 years having a yield to maturity of 7 percent, and interest rates are expected to rise by 50 basis points. What is the percentage change in the price of the bond?

• A) 3.62 percent
• B) 3.45 percent
• C) -3.38 percent
• D) 3.38 percent
• E) -3.62 percent

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Definitions:

Specific Phobia

A severe and irrational fear of a specific object, situation, or activity that poses minimal to no actual danger.

Social Phobia

An anxiety disorder characterized by an intense fear of social situations, leading to avoidance of such situations and significant distress.

Post-Traumatic Stress Disorder

A psychiatric disorder that can occur in people who have experienced or witnessed a traumatic event, characterized by flashbacks, nightmares, and severe anxiety.

Situational Phobia

A type of anxiety disorder characterized by an intense, irrational fear of specific situations, places, or events that poses little to no actual danger.