Suppose you have the following bond: Par Value: $1,000.00 Price: $1,105.90 Coupon 3.775%/period YTM: 2.9105%/period
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Question:
Suppose you have the following bond:
Par Value: | $1,000.00 |
| Price: | $1,105.90 |
Coupon | 3.775%/period |
| YTM: | 2.9105%/period |
Duration: | 11.906 periods |
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According to duration, how much is the price predicted to change if the yield to maturity goes down by 0.25% per period?
Rise by $31.99.
Fall by $28.92.
The current price, not the par value, determines interest rate sensitivity. (Also, check the sign.)
Fall by $31.99.
Rise by $28.92.
Fall by $3,198.62.
Related Book For
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto
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