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If I told you I own a bond mutual fund that has a Modfied Duration of 6.25 years. a. What is (calculate) what my expected
If I told you I own a bond mutual fund that has a Modfied Duration of 6.25 years. a. What is (calculate) what my expected percentage gain/loss on my bond's price is if the Treasury Market yields suddenly decreased by 0.12%. b. After this 0.12% decrease in rates, does my duration get longer or shorter as a result?
1. a. Gain of 0.75% b. Longer
2. a. Loss of 0.75% b. Shorter
3. a. Loss of 6.25% b. Shorter
4. a. Gain of 6.25% b. Longer
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