9. Assuming that the duration of Bond A is 1.94 years, which of the following statements about the effect of a 1% decline in interest rates is true? A. Bond C, having a longer duration than Bond A, would have a larger percentage increase in price than Bond A. B. The percent change in a price of a bond is independent of the duration of a bond. C. It is not possible to determine the percent change in price of Bond A versus Bond C because the duration of Bond C is not given. D. Bond A would have a greater percent change in price vs. Bond C because it has a shorter duration. E. The percent change in the price of Bond A and C is equal since it is not affected by duration. Make your selection:

9. Assuming that the duration of Bond A is 1.94 years, which of the following statements about the effect of a 1% decline in interest rates is true? A. Bond C, having a longer duration than Bond A, would have a larger percentage increase in price than Bond A. B. The percent change in a price of a bond is independent of the duration of a bond. C. It is not possible to determine the percent change in price of Bond A versus Bond C because the duration of Bond C is not given. D. Bond A would have a greater percent change in price vs. Bond C because it has a shorter duration. E. The percent change in the price of Bond A and C is equal since it is not affected by duration. Make your selection:

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 3Q: The rate of return on a bond held to its maturity date is called the bonds yield to maturity. If...

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