Consider a Bond with a Duration of 7 Years Having

question 24

Multiple Choice

Consider a bond with a duration of 7 years having a yield to maturity of 7% 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%
• B) 3.45%
• C) -3.38%
• D) 3.38%
• E) -3.62%

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Definitions:

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events, rather than being the cause of physiological reactions.

Cannon-Bard Theory

A theory of emotion that proposes that emotional feelings and physiological reactions to stimuli are experienced simultaneously, rather than one causing the other.

Two-Factor Theory

A theory in psychology proposing that emotional experiences arise from a combination of cognitive appraisal and physiological arousal.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.