Question: 1) Consider a 1-factor parallel yield shift model with a flat structure of forwarding rates y . How the increase in y affects the Duration

1)Consider a 1-factor parallel yield shift model with a flat structure of forwarding rates y. How the increase in y affects the Duration of zero-coupon bonds?

A) Increase

B)Decrease

C)Has no effect

D)None of the above: the exact answer (A), (B), or (C) depends on the time to maturity and face value of the bond

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