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    Principles of Corporate Finance Study Set 5
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    Exam 3: Valuing Bonds
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    If a Bond's Volatility Is 10% and the Interest Rate
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If a Bond's Volatility Is 10% and the Interest Rate

Question 50

Question 50

Multiple Choice

If a bond's volatility is 10% and the interest rate goes down by 0.75% (points) then the price of the bond:


A) decreases by 10%
B) decreases by 7.5%
C) increases by 7.5%
D) increases by 0.75%

Correct Answer:

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