Question
1. Bond C, which has the longest maturity, is likely to have the (largest/smallest) modified duration, so (is/ is not) the answer. Bonds A and
1. Bond C, which has the longest maturity, is likely to have the (largest/smallest) modified duration, so (is/ is not) the answer. Bonds A and B have the same maturity, but B has (higher/lower) coupons, so more front-loaded payments. Thus, B is likely to have a (lower/higher) modified duration than.
| Bond | Price | Coupon Rate | Time to Maturity |
|---|---|---|---|
| A | 101.886 | 5% | 2 years |
| B | 100.000 | 6% | 2 years |
| C | 97.327 | 5% | 3 years |
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The Misbehavior Of Markets A Fractal View Of Financial Turbulence
Authors: Benoit Mandelbrot, Richard L Hudson
1st Edition
0465043577, 978-0465043576
