A Bond Has a Macaulay's Duration of 21 Years

question 49

Multiple Choice

A bond has a Macaulay's duration of 21 years. If rates rise from 5% to 5.5%, the bonds price will:

• A) increase by approximately 1%.
• B) decrease by approximately 1%.
• C) increase by approximately 10%.
• D) decrease by approximately 10%.
• E) Not enough information is given to answer the question.

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Definitions:

Discriminatory Practices

Unfair treatments or prejudices towards individuals or groups based on race, gender, age, or other characteristics.

Wealth Distribution

This refers to the manner in which wealth is shared or distributed among the individuals in a society, often highlighting the disparities between different economic classes.

Race

A social construct used to categorize humans into large and distinct populations based on physical characteristics, ancestry, and genetics.

Middle Class

The middle class is a socio-economic grouping characterized by moderate income levels, educational attainment, and occupational statuses, often considered the backbone of society.