Question
Fill in the Blanks: a.) The shape of the price-yield relationship for standard coupon bonds is referred to as a _________ (concave/convex) relationship. This relationship
Fill in the Blanks:
a.) The shape of the price-yield relationship for standard coupon bonds is referred to as a _________ (concave/convex) relationship. This relationship is not _________ (linear/nonlinear).
b.) Although the prices of standard coupon bonds move in the _________ (same/opposite) direction from the change in yield, the percentage price change _________ (is/is not) the same for all bonds.
c.) For very _________ (small/large) changes in the yield, the percentage price change for a given bond is roughly the same, whether the yield increases or decreases. For _________ (small/large) changes in the yield, the percentage price change is not the same for an increase in the required yield as it is for a decrease in the yield. For a given large change in yields, the percentage price increase is _________ (smaller/greater) than the percentage price decrease.
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