Multiple Choice
Par-value bond XYZ has a modified duration of 6. 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 $60.
B) If the market yield increases by 1%, the bond's price will increase by $50.
C) If the market yield increases by 1%, the bond's price will decrease by $50.
D) If the market yield increases by 1%, the bond's price will increase by $60.
Correct Answer:
Verified
Correct Answer:
Verified
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