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Assume that the modified duration of a bond is 2.45 years and that the potential adverse move in yield is 16.5 basis points. What is the bond's price volatility (round to two decimals)?    A. -2.45 ´ 0.0165 = -4.04%. B. 2.45 X 0.00165 = 0.40%. C. -2.45 ´ 0.00165 = -0.40%. D. 2.45 ´ 0.0165 = 4.04%.

Assume that the modified duration of a bond is 2.45 years and that the potential adverse move in yield is 16.5 basis points. What is the bond's price volatility (round to two decimals)?    A. -2.45 ´ 0.0165 = -4.04%. B. 2.45 X 0.00165 = 0.40%. C. -2.45 ´ 0.00165 = -0.40%. D. 2.45 ´ 0.0165 = 4.04%.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Assume that the modified duration of a bond is 2.45 years and that the potential adverse move in yield is 16.5 basis points. What is the bond's price volatility (round to two decimals)? 

 

A.

-2.45 ´ 0.0165 = -4.04%.

B.

2.45 X 0.00165 = 0.40%.

C.

-2.45 ´ 0.00165 = -0.40%.

D.

2.45 ´ 0.0165 = 4.04%.

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