Multiple Choice
An open-end bond mutual fund is holding a three-year,$1 million face value 5 percent annual coupon bond selling at par.What is the impact on the total asset value of the fund of a 1 percent decrease in interest rates?
A) A decrease of $10,000.
B) An increase of $10,000.
C) A decrease of $26,730.
D) An increase of $27,751.
Correct Answer:
Verified
Correct Answer:
Verified
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