An Annual Payment Bond Has a 9% Required Return

question 56

Multiple Choice

An annual payment bond has a 9% required return. Interest rates are projected to fall 25 basis points. The bond's duration is 12 years. What is the predicted price change?

• A) -2.75%
• B) 33.33%
• C) 1.95%
• D) -1.95%
• E) 2.75% -12  (-0.0025/1.09)

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