onsider the following two Treasury securities: Bond Price Modified duration (years) A $100 6 B $80 7   For a 25 basis-point change in interest rates, which bond has the greatest percentage change in price?   A. Bond A   B. Bond B    C. Can't be determine

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A: MaturityPrice of Bond1 $        910.902 $        907.973 $        828.124 $        768.49

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A:

Q: Problem 7-21 Bond Prices and Interest Rate Changes (LG7-5) A 6.90 percent coupon bond with 23 years…

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.