Using its modified duration, the price of a coupon bond is forecasted to change from...
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Accounting
Using its modified duration, the price of a coupon bond is forecasted to change from $990 to $925 due to an increase in interest rates. If the bonds convexity is considered, the new forecasted price of the bond will be:
higher than $925.
lower than $925.
equal to $925.
Cannot be determined.
2-
If two coupon bonds are equivalent in all other respects, which will have the higher convexity?
The bond with the higher coupon.
The bond with the longer maturity.
The bond with the greater yield.
The bond with the lower credit rating.
3-
$100,000 and has determined 5 years is his maximum term. He puts $20,000 in one-year bonds, $20,000 in two-year bonds, etc. up to $20,000 in five-year bonds. This is an example of:
a barbell strategy.
a laddering strategy.
an immunization strategy.
a term management strategy.
Which of the following 10-year, 8% bonds will offer the highest YTM?
AAA-rated, callable bond
AAA-rated, non-callable bond
BBB-rated, callable bond
BBB-rated, non-callable bond
Please select the correct answers
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