(5) A company's bond is trading at a yield of 6.5%, while a similar risk-free bond...
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(5) A company's bond is trading at a yield of 6.5%, while a similar risk-free bond is yielding 4.5%. The bond has a spread duration of 0.75 years. If interest rates increase by 50 basis points, calculate the approximate percentage change in the bond's price. a -3.50% b -2.25% C -1.25% d -0.75% (5) A company's bond is trading at a yield of 6.5%, while a similar risk-free bond is yielding 4.5%. The bond has a spread duration of 0.75 years. If interest rates increase by 50 basis points, calculate the approximate percentage change in the bond's price. a -3.50% b -2.25% C -1.25% d -0.75%
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