Suppose a bonds price is expected to increase by 5% if its market discount rate decreases by

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Suppose a bond’s price is expected to increase by 5% if its market discount rate decreases by 100 bps. If the bond’s market discount rate increases by 100 bps, the bond price is most likely to change by:

A. 5%.

B. Less than 5%.

C. More than 5%.

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Fixed Income Analysis

ISBN: 9781119627289

4th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 04, 2023 11:10 PM

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Suppose a bonds price is expected to increase by 5% if its market discount rate decreases by

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The correct answer is C More than 5 The relationship between bond prices and market discount rates i...View the full answer

Fixed Income Analysis

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