Which one of the following bonds would you select if you thought market interest rates were going
Question:
Which one of the following bonds would you select if you thought market interest rates were going to fall by 50 basis points over the next six months?
a. A bond with a Macaulay duration of 8.36 years that’s currently being priced to yield 7.25%
b. A bond with a Macaulay duration of 9.23 years that’s priced to yield 9.86%
c. A bond with a Macaulay duration of 8.68 years that’s priced to yield 5.94%
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This question is about bond price volatility We need to measure the responsiveness of a bonds price ...View the full answer
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Related Book For
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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