Question: Select the answer/answers that is/are correct. (this question worth 2 points). Group of answer choices If we know only the duration and the face value
Select the answer/answers that is/are correct. (this question worth 2 points).
Group of answer choices
If we know only the duration and the face value of the bond we can calculate the future value of the bond's coupons.
Everything else equal, Bond A will have shorter duration than bond B if bond A has higher coupon rate than bond B
If you want to avoid both the reinvestment risk and the price risk you can purchase a 3-year zero coupon bond and keep it until maturity.
If we know only the maturity of a zero coupon bond, we can calculate the bond's duration
If the YTM is higher than the reinvestment rate then the bond will have total/realized return that is lower than the YTM.
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