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Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates.

Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates.

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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The second question. Thank you.

**Question 14** Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates. - A. -5.4% - **B. -6.4%** (Selected) - C. -8.6% - D. -4.8% **Question 15** Using the information in Question 14 above, estimate the price of the bond for a 200 basis-point increase in interest rates. - A. $936 - B. $1002 - C. $964 - D. $1012
Transcribed Image Text:**Question 14** Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates. - A. -5.4% - **B. -6.4%** (Selected) - C. -8.6% - D. -4.8% **Question 15** Using the information in Question 14 above, estimate the price of the bond for a 200 basis-point increase in interest rates. - A. $936 - B. $1002 - C. $964 - D. $1012
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