A Bond Has a Duration of 6 Years and a Present

question 56

Multiple Choice

A bond has a duration of 6 years and a present yield-to-maturity of 7%. If the yield-to-maturity falls to 5%, the approximate bond price change would be

• A) +28.6%.
• B) +22.3%.
• C) +11.2%.
• D) +17.4%.

---

Definitions:

Therapeutic Procedures

involve medical or surgical methods applied to improve health, alleviate symptoms, and treat diseases.

Systematic Desensitization

A behavioral therapy technique aimed at reducing anxiety through gradual exposure to the feared object or situation paired with relaxation exercises.

Exposure Therapy

A psychological treatment method where individuals confront their fears in a controlled environment to reduce their sensitivity.

Aversive Conditioning

A form of behavior therapy that involves using unpleasant stimuli to reduce or eliminate undesirable behaviors.