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QUESTION 5 Par value bond has a modified duration of 8. Which one...

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Finance

QUESTION 5

  1. Par value bond has a modified duration of 8. Which one of the following statements regarding the bond is true?

    A.

    If the market yield decreases 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 $60.

    C.

    If the market yield increases by 1% the bond's price will decrease by $80.
    D.

    If the market yield decreases by 1% the bond's price will increase by $80.
    E.

    If the market yield increases by 1% the bond's price will increase by $70.

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