A Bond Has a YTM of 6

question 39

Multiple Choice

A bond has a YTM of 6.75%, a modified duration of 14.05 years, a duration of 15 years and a 20 year maturity. By what percentage will the bond's price change if market interest rates decrease by 0.75%?

• A) -0.750 percent
• B) +0.750 percent
• C) +10.53 percent
• D) -10.53 percent

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Definitions:

α-Amylase

An enzyme that breaks down starches into sugars, playing a critical role in the digestion of carbohydrates.

Gibberellin

A plant hormone involved in many aspects of plant growth and development, such as stem elongation, flowering, and seed germination

Stem Elongation

A phase of plant growth where the stem or shoot rapidly increases in length due to cell division and elongation.

Gibberellin

A class of plant hormones that regulate growth and influence various developmental processes, including stem elongation and germination.