Consider a Bond with a Duration of 6 Years Having

question 16

Multiple Choice

Consider a bond with a duration of 6 years having a yield to maturity of 8% and interest rates are expected to rise by 50 basis points.What is the percentage change in the price of the bond?

• A) 2.88%
• B) 3.45%
• C) -3.89%
• D) -3.45%
• E) -2.88%

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Definitions:

Moods

Temporary states of mind or feelings that are less specific and less intensive than emotions and can influence an individual's perception and behavior.

Differences

Variations or disparities among individuals, objects, or situations.

Happiness

A state of well-being and contentment characterized by positive emotions and satisfaction.

Polar Bear

A large carnivorous bear found primarily in the Arctic, characterized by its white fur, which helps it blend in with its snowy environment.