Question
You own a bond that has a Macaulays duration of 6 years. Interest rates are currently 7%, but you believe the Fed is about to
You own a bond that has a Macaulays duration of 6 years. Interest rates are currently 7%, but you believe the Fed is about to increase interest rates by 25 basis points. Your predicted price change on this bond is ________.
A. +1.4%
B. -1.4%
C. -2.51%
D. +2.51%
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International Finance Discussion Papers A Framework For Economic Forecasting
Authors: United States Federal Reserve Board, Neil R. Ericsson, Jaime Marquez
1st Edition
1288733585, 9781288733583
