Question
If an investor has a 6 year investment horizon and chooses a bond with a 10 year duration then if interest rates increase then A)
If an investor has a 6 year investment horizon and chooses a bond with a 10 year duration then if interest rates increase then
A) the bond's sale price increase will be more than the lost reinvestment income.
B) the bond's sale price drop will be more than the extra reinvestment income.
C) the bond's sale price drop will be less than the extra reinvestment income.
D) the bond's sale price increase will be less than the lost reinvestment income.
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Financial Management For Public Health And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
7th Edition
1071835335, 978-1071835333
