Question
A bond has a MacD of 14.6, ModD of 13.8 and DV01 of $2.5. Suppose its yield to maturity goes up two percentage points (e.g.,
A bond has a MacD of 14.6, ModD of 13.8 and DV01 of $2.5. Suppose its yield to maturity goes up two percentage points (e.g., from 5% to 7%). Which of the following is the most likely to be true?
| The bond price should decrease by approximately 27.6%. | ||
| The bond price should decrease by approximately $27.6. | ||
| The bond price should increase by approximately 27.6%. | ||
| The bond price should decrease by approximately $5. | ||
| The bond price should increase by approximately $29.2. |
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
1st Edition
0130176141, 9780130176141
