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
Problem 1PS
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Question
You buy a bond that has no default risk with a duration of 12 years. The
yield on the bond is 10%. The volatility of yields is 0.2% during a short
period that you are thinking of investing in the bond. During this period, no
coupon payments will be paid. What is the volatility of your return over this
period?
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