Question: How do we get the 1-year and 10-year values from these numbers? Is it not possible to derive these numbers from the figures given and
What is interest rate (or price) risk? Does a l- year or 10-year bond have more interest rate risk? dow toget? Interest rate risk is the concern that rising ra will cause the value of a bond to fall. 1-year Change 10-year Change $1,048 4.8% $1,386 +38.6% 10% $1,000 $1,000 15% -25.1% 956 - 4.4% 749 it deceavy 5% if increase . The 10-year bond is more sensitive to interest rate changes, and hence has more interest rate risk
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
