Briefly explain what will happen to a bonds duration measure if each of the following events occur a The yield to maturity on the bond falls from 8 5 to 8 b The bond gets 1 year closer to its maturity c Market interest rates go from 8 to 9 d The bonds modified duration falls by half a year ...

a Higher yields lead to shorter durations lower yields l ...

Briefly explain what will happen to a bonds duration measure if each of the following events occur.

Question:

Briefly explain what will happen to a bond’s duration measure if each of the following events occur.
a. The yield to on the bond falls from 8.5% to 8%.
b. The bond gets 1 year closer to its Market interest rates go from 8% to 9%.
d. The bond’s modified duration falls by half a year.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...