Question
. John and Ron are assistant portfolio managers for Big Alpha Partners. In a review of the interest rate risk of a portfolio, John and
. John and Ron are assistant portfolio managers for Big Alpha Partners. In a review of the interest rate risk of a portfolio, John and Ron discussed the riskiness of two Treasury securities. Following is the information about these two Treasuries.
BOND PRICE DURATION
A $90 4
B $50 6
Ron noted that Treasury bond B has more price volatility because of its higher duration. John disagreed noting that Treasury bond A has more price volatility despite its lower duration. Which manager is correct?
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Financial Trading And Investing
Authors: John Teall
3rd Edition
0323909558, 978-0323909556
