Question

Which one of the following bonds would you select if you thought market interest rates were going to fall by 50 basis points over the next 6 months?
a. A bond with a Macaulay duration of 8.46 years that’s currently being priced to yield 7.5%
b. A bond with a Macaulay duration of 9.30 years that’s priced to yield 10%
c. A bond with a Macaulay duration of 8.75 years that’s priced to yield 5.75%


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  • CreatedApril 28, 2015
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