Course: Securities & Investments

1. Why might you want to match bond durations to the target date of your portfolio?

A. To maximize total return B. To reduce interest rate risk C. To immunize it D. To reduce its duration

2. The price of a bond decreases by 2.32 percent in response to an increase in the yield to maturity from 5.8 to 6.7 percent. What the bond's Macaulay duration?

A. 2.65 years B. 3.10 years C. 2.89 years D. 3.53 years