If a bond's volatility is 10.00 percent and the interest rate goes down by 0.75 percent (points), then the price of the bond
A)decreases by 10.00 percent.
B)decreases by 7.50 percent.
C)increases by 7.50 percent.
D)increases by 0.75 percent.

Name: If a bond's volatility is 10.00 percent and the interest rate goes down by 0.75 percent (points), then the price of the bond A)decreases by 10.00 percent. B)decreases by 7.50 percent. C)increases by 7.50 percent. D)increases by 0.75 percent.
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Question

Quizplus · Accepted Answer

The Answer is C

If a Bond's Volatility Is 10