Question
Which one of the following bonds would you select if you thought market interest rates were going to fall by 50 basis points over the
Which one of the following bonds would you select if you thought market interest rates were going to fall by 50 basis points over the next sixmonths?
a. A bond with a Macaulay duration of 7.21 yearsthat's currently being priced to yield 9.23%.
b. A bond with a Macaulay duration of 17.34 yearsthat's priced to yield 8.74%.
c. A bond with a Macaulay duration of 7.81 yearsthat's priced to yield 7.18%
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
3rd Canadian Edition
978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042
