Multiple Choice
Par value bond GE has a modified duration of 11.Which one of the following statements regarding the bond is true?
A) If the market yield increases by 1% the bond's price will decrease by $55.
B) If the market yield increases by 1% the bond's price will increase by $55.
C) If the market yield increases by 1% the bond's price will decrease by $110.
D) If the market yield increases by 1% the bond's price will increase by $110.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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