Volatility of a bond is given by:
I. Duration/ (1 + yield)
II. Slope of the curve relating the bond price to the interest rate
III. Yield to maturity
A) I only
B) II only
C) III only
D) I and II only

Question

Quizplus · Accepted Answer

Volatility of a bond is often measured by its duration adjusted for yield, which is represented by I. Additionally, the slope of the curve relating bond price to interest rate changes (II) also indicates bond price sensitivity, hence volatility.

Volatility of a Bond Is Given By