Multiple Choice
Assume that the required yield to maturity on a consol bond increases from 6% to 12%.What is the impact on the consol bond's duration?
A) As there are no intervening cash flows between issue and maturity, the duration will always equal the bond's maturity.
B) As interest rates rise, the duration of consol bonds falls.
C) As interest rates rise, the duration of consol bonds rises.
D) There will be no impact on the bond's duration.
Correct Answer:
Verified
Correct Answer:
Verified
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