Question
A bond with maturity of 5 years, 8% YTM, semi-annual bond has modified duration 3.5. Assuming a holding period of 3 years and an increase
A bond with maturity of 5 years, 8% YTM, semi-annual bond has modified duration 3.5. Assuming a holding period of 3 years and an increase in interest rate to 10% right after the bond is purchased, your HPR would be:
A. Greater than 8%
B. Less than 8%
C. 8%
D. Cannot be determined
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Financial Markets And Institutions An Introduction To Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
3rd Edition
0073250937, 9780073250939
