Multiple Choice
With a four-year bond of face value $1000 paying an annual coupon of 6%,if current market yields of 6% change to 7%:
A) its duration will increase.
B) the duration price formula will underestimate the change in price.
C) the duration price formula will overestimate the change in price.
D) its duration will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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