Suppose a bonds price is expected to increase by 5% if its market discount rate decreases by

Question:

Suppose a bond’s price is expected to increase by 5% if its market discount rate decreases by 100 bps. If the bond’s market discount rate increases by 100 bps, the bond price is most likely to change by:

A. 5%.

B. Less than 5%.

C. More than 5%.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

Question Posted: